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I was hired, on a 1099 basis, to write a piece of software for a client. I created a contract to specify the work to be done and the cost. I was paid the full amount owed to me. However, the client never signed the contract, nor did I sign it. I sent him the contract about six months ago, as a first pass at a contract and figured we would haggle a bit back and forth. In the mean-time, I started work on the project and was paid in full, despite not having any sort of written agreement.

My question is this. Who owns the software I wrote? We were going to come to an agreement about that in the contract, but, as I said, the client never signed it and he never actually attempted to contact me during the course of my work to discuss it.

I know this sounds like an odd situation, that I would be paid, in full, without an agreed upon contract, but it happened.

This is in the United States.

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    "...despite not having any sort of written agreement." Did you have an oral or email agreement? Did you talk or email about the job details and the cost and deliverables? Or were all of the details written in the unsigned contract? – BlueDogRanch Aug 2 '17 at 22:53
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The software is "work for hire" and the copyright is owned by the client, not you. This is the default rule when copyrightable work is done on this basis in the absence of an agreement to the contrary. To not be "work for hire" you would have had to have a written agreement to the contrary or would have had to written the software before you were engaged by the client and then sold it to the client as an off the shelf finished product.

[After further research I have determined that the language above is not accurate.]

While you didn't have a written agreement, you did have an agreement reached without committing it to a final written form signed by both parties that is sufficient to cover all of the material terms of the contract and that is a binding and fully performed agreement.

UPDATE: The "work for hire" issue is a bit more complex than I initially stated. Here is an American Bar Association summary of the issue in the independent contractor context (there is also a plausible argument that while the parties characterized you as an independent contractor for tax purposes that you were in fact of de facto temporary employee in which case it would automatically be work for hire, but I'll put that issue aside and take it at face value):

Under the Copyright Act (17 U.S.C. §§ 101 et seq.), a work is a “work made for hire” only if: (1) it is prepared by an employee within the scope of his employment; or (2) it is specially ordered or commissioned from an independent contractor pursuant to a written agreement and the work falls within one of nine statutorily defined categories. . . .

For works created by independent contractors, only the following types of works are eligible to be “works made for hire”:

  • a contribution to a “collective work” (a work, such as a periodical issue, anthology, or encyclopedia, in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole);

  • a part of a motion picture or other audiovisual work;

  • a translation;

  • a “supplementary work” (a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes);

  • a “compilation” (a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship);

  • an “instructional text” (a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities);

  • a test;

  • answer material for a test; or

  • an atlas.

This software is clearly specially ordered or commissioned from an independent contractor. I suspect that if you looked at the course of dealings including the client's specification of what work needed to be done (probably in part by email or in some other written form) that it would meet the requirement of a written agreement even though there wasn't a document called a contract signed by both parties. But, this still begs the question of whether it falls in one of the nine statutory categories.

This American Bar Association source says that custom software doesn't qualify.

The list above does not include many types of works that businesses frequently hire outside personnel to create, such as websites, logos, advertisements, photography, and custom software. For works that do fall within the defined categories, the business must have a written agreement from the author expressly stating that the work is made for hire for it to qualify as such.

Although the agreement and course of dealings between a business and an independent contractor may give rise to an implied license for the business to use the works created by the contractor, it is highly preferable to avoid relying on an implied license. Any business that engages a non-employee to create a work and intends to own the copyright to such work should have a written agreement with the author expressly stating that the work is made for hire (if it falls within one of the eligible categories). If the work is not eligible to be a work made for hire, and for good measure even if it is, the written agreement should include a provision assigning the copyrights to the business. An example of such a provision is: “To the extent that the Work Product is not recognized as a ‘work made for hire’ as a matter of law, the Contractor hereby assigns to the Company any and all copyrights in and to the Work Product.” By including such a copyright assignment clause, a business will be able to obtain the copyrights it expects, even if the work does not qualify as a “work made for hire.”

The copyright office's official publication on the subject provides a statutory citation (17 USC 101), and doesn't contradict the ABA presentation, although it is less detailed and specific on the legal issues. This section of the United States Code is a series of definitions. The relevant one states:

A “work made for hire” is—

(1) a work prepared by an employee within the scope of his or her employment; or

(2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire. For the purpose of the foregoing sentence, a “supplementary work” is a work prepared for publication as a secondary adjunct to a work by another author for the purpose of introducing, concluding, illustrating, explaining, revising, commenting upon, or assisting in the use of the other work, such as forewords, afterwords, pictorial illustrations, maps, charts, tables, editorial notes, musical arrangements, answer material for tests, bibliographies, appendixes, and indexes, and an “instructional text” is a literary, pictorial, or graphic work prepared for publication and with the purpose of use in systematic instructional activities.

In determining whether any work is eligible to be considered a work made for hire under paragraph (2), neither the amendment contained in section 1011(d) of the Intellectual Property and Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, nor the deletion of the words added by that amendment—

(A) shall be considered or otherwise given any legal significance, or

(B) shall be interpreted to indicate congressional approval or disapproval of, or acquiescence in, any judicial determination, by the courts or the Copyright Office. Paragraph (2) shall be interpreted as if both section 2(a)(1) of the Work Made for Hire and Copyright Corrections Act of 2000 and section 1011(d) of the Intellectual Property and Communications Omnibus Reform Act of 1999, as enacted by section 1000(a)(9) of Public Law 106-113, were never enacted, and without regard to any inaction or awareness by the Congress at any time of any judicial determinations.

  • There being a number of legal consequences to being an employee, taxes and medical for example, since the employer apparently didn't embrace those consequences, wouldn't the employer be estopped from claiming that the programmer was a de facto temporary employee? – user6726 Aug 3 '17 at 0:57
  • @user6726 Probably not. Tax and regulatory authorities routinely reclassify workers in ways that help one party and hurt another even when both have agreed to the contrary prior to any dispute arising, and the test for who is an employee is different, for example, for worker's compensation purposes or anti-discrimination law purposes, than it is for federal tax purposes. In general, U.S. law frequently applies inconsistent definitions of the same terms in different areas of law based upon the policies implicated in different contexts. – ohwilleke Aug 3 '17 at 1:24
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The contract is binding even though it was never signed. Your offer was in the form of the written contract: they accepted it by conduct (accepting the software and paying your bill).

The copyright belongs to whoever the contract says it belongs to. If the contract is silent and if you are an independent contractor not performing work for hire then that's you. They would have a perpetual license to use it.

  • I would agree that they had a contract, although I'm not sure that I could conclude that the written proposal was actually agreed to. I agree that the contract can allocate ownership but don't agree that there was a meeting of the minds on this point. While he was an independent contractor, I would still say that this is work for hire because he was writing custom software pursuant to their request to fit their particular needs, rather than writing software on a spec basis and then selling it after it was done. Employee v. independent contractor is not controlling for work for hire purposes. – ohwilleke Aug 2 '17 at 23:04
  • After some research, I have to concede that we are both wrong on the capacity of a contract to make software "work for hire" and that this software copyright probably belongs to the contractor and not the client with an implied license as you suggest. – ohwilleke Aug 2 '17 at 23:25
  • @ohwilleke do some research on the last document rule or 'battle of the forms' – Dale M Aug 3 '17 at 1:28
  • It doesn't sound from the question like this is really a "battle of the forms" situation. While a discussion draft of the contract was circulated, it doesn't sound like the contractor stated that performance of the contract would constitute acceptance of the discussion draft or like the discussion draft was even a true contractual offer. The fact that the contractor didn't sign it either is particularly telling on this point. – ohwilleke Aug 3 '17 at 1:34
  • @ohwilleke The principal had the contractor's proposed terms and there were no other terms discussed. An order in those circumstances would be on the only terms in existence. It's still a battle of the forms with the contractor's form being the last (and only) form. – Dale M Aug 3 '17 at 1:37
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Under US copyright law you would still own the copyright of your works unless they can prove you gave them a written and signed transfer of your copyright, as you were the "legal author" (as it was not a "work made for hire") and thus automatically owned the copyright. 17 USC §§ 201, 204.

As discussed by others, the US law on copyright ownership of "works made for hire" is far more restrictive on clients' ownership than what might seem natural expectations when hiring an independent contractor.

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