Who Owns Your Software? Without a Written Agreement, the Software Developer May

This DeveleperDotStar.com article stresses the absolutely essential requirement that written agreements be entered with independent software developers, preferably prior to their beginning work, stating:

"Businesses all over the United States hire software developers to create software that offers a competitive advantage or cuts operating costs. Frequently both business owners and software developers enter into these agreements to develop software without addressing the issue of copyright. How does copyright law apply to these kinds of agreements, especially in cases where copyright ownership is not addressed explicitly? Who owns the software?...

Copyright ownership is critical, since the copyright owner will have the exclusive right to reproduce, distribute, and create a derivative work (among other rights)...

The Federal law addressing this situation is entitled The Copyright Act of 1976, 17 USC 201(a). The general rule is that the author of the work owns the copyright. The Copyright Act, however, contains an important exception called the "work for hire" doctrine. If the facts establish that the "work for hire" doctrine applies, the person for whom the work was created (in this case the shop owner) would own the copyright. The "work for hire" doctrine applies when employees create works within the scope of their employment or a situation where a certain type of work is specially ordered or commissioned by which an express agreement is to be considered a work for hire..."

The article continues by referring to this copylaw.com piece that states:

"For a work created by an independent contractor (or freelancer) to qualify as a work for hire, three specific conditions found in the Copyright Act must be meet:

1. the work must be "specially ordered" or "commissioned." What this means is the independent contractor is paid to create something new (as opposed to being paid for an already existing piece of work); and

2. prior to commencement of work, both parties must expressly agree in a signed document that the work shall be considered a work made for hire; and

3. the work must fall within at least one of the following nine narrow statutory categories of commissioned works list in the Copyright Act:

(1) a translation, (2) a contribution to a motion picture or other audiovisual work, (3) a contribution to a collective work (such as a magazine), (4) as an atlas, (5) as a compilation, (6) as an instructional text, (7) as a test, (8) as answer material for a test, (9) or a supplementary work (i.e., "a secondary adjunct to a work by another author" such as a foreword, afterword, chart, illustration, editorial note, bibliography, appendix and index)."

Software does not fall under any of these categories, making essential a written agreement spelling out the ownership of copyright.