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At my university (it is a public Florida university), one of the core computer science courses required for the degree involves a group project, and the class is divided up into a dozen or so teams, each with their own project. This is fairly common.

The questionable thing is this: local companies each pay the department a few thousand dollars to have the students develop their software for them, since it is cheaper than hiring professionals. The students, who are paying tuition, don't get a cut of this money. While this can be an ethical debate (they are getting experience, but they are paying to work for free, etc.), I would like to know about the legality of this.

  • I think it is important for an answer to consider public vs private universities – Viktor Apr 15 at 5:48
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    Such arrangements are not uncommon in US higher education, and you can bet the whole thing has been carefully scrutinized by the university's lawyers, who I will venture to say have thought about it much harder than anyone on this website. If this were not legal, it's unlikely it'd still exist. – Nate Eldredge Apr 17 at 1:51
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    @phoog: To me, the closest analogy is unpaid internships, where a student does work for a company in exchange for academic credit. There is an established test for the legality of such internships with respect to minimum wage law. Most of the factors seem to be met here; I think the main one at issue is #6: "The extent to which the intern’s work complements, rather than displaces, the work of paid employees while providing significant educational benefits to the intern." [...] – Nate Eldredge Apr 17 at 3:52
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    But in fact such projects are usually things that the company would find interesting or beneficial in some way, but not interesting enough to pay employees regular wages to do it; so that it doesn't tend to displace paid employees. And the university faculty will typically sign off that they consider the project as providing significant educational benefits. – Nate Eldredge Apr 17 at 3:55
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It depends on the agreement between the parties.

In analyzing the debate between @Moo and @Greendrake in the comments to the answer by @Greendrake, it's clear that any contract between the parties will control. And in the absence of any agreement to the contrary, the student owns the copyright.

Controlling agreements could include any tuition agreement, scholarship grants, admissions, enrollment or application agreement at the university level and, at the course level, a simple waiver would be sufficient to assign intellectual property rights.

@Greendrake seems to be arguing no IP assignment is valid unless it is accompanied by a standalone payment from the university to the student. That is an incorrect interpretation of contract law. In this case, the entirety of the contract, including the education services provided by the university, would serve as sufficient consideration for the contract to be binding on both parties. Evidence of the sufficiency of consideration would be the agreement itself and the behavior of the parties, including the payment of any tuition by the student.

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    But the education services provided by the university are already provided in consideration for tuition charges. If that account is settled, how can they also be consideration for labor provided by the students? – phoog Apr 17 at 3:23
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    @phoog: Your comment begs the question and assumes its conclusion with your qualification: "if that account is settled." That's the point of my answer. In other words, does the tuition settle the account or does it not? It depends on the agreement between the parties. I handle the case you are assuming in the last sentence of paragraph two: "in the absence of any agreement to the contrary, the student owns the copyright." – Alexanne Senger Apr 17 at 3:33
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    @phoog: There are plenty of situations where the student has to pay consideration beyond their regular tuition in order to take a particular course; lab fees, field trip costs, etc. This would typically be stated as part of the basic agreement with the student. So the group project course could be another example of the same, but here, the additional consideration to be provided is the student's assignment of the IP rights. – Nate Eldredge Apr 17 at 4:02
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    @phoog: In other words, you seem to be assuming that the university, in exchange for the base tuition payment, promised the student the right to take all possible courses without additional consideration. I don't think that was ever the deal. – Nate Eldredge Apr 17 at 4:03
  • Ever heard of illusory consideration? See my answer updated. – Greendrake Apr 17 at 5:50
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The university certainly can, as part of its study programme, require students to develop software (for free).

However, as the students are not hired to write the software, they own the copyright.

The university violates that copyright by selling the software to third parties.

The students can legally require the university to stop doing that, or to agree to pay them a % of the revenue.

One can argue that transferring the copyright / IP to the university could be part of the student's consideration (on top of any tuition fees they pay). The problem with this is that, whilst the students have to produce software to get a pass mark, they do not have to do it contract-wise: the university won't have a legal stand to sue the students for damages should they not deliver the software. Yes they will fail the course but they will still fulfil their contract obligations. Therefore, the software/IP "consideration" here is illusory. An illusory consideration is not good one, hence it is not part of the contract.

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    There may be a copyright grant or assignment to the university in the tuition agreement, so this answer isnt as blanket as it sounds. – Moo Apr 15 at 6:18
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    And where do you believe that from? Copyright grants or assignments are a common thing, especially in opensource software development (note I said common, not the norm) where there is no payment (if you want your code in the master branch, you assign copyright to the owner if the project), and it seems to have withstood the test of time there. – Moo Apr 15 at 6:23
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    @Greendrake the students have to receive consideration - not necessarily payment. Their education is good consideration. – Dale M Apr 15 at 22:52
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    Academic standards for authorship are tangential to legal standards for authorship. They are very barely based on similar principles, vary enormously, and can be totally ignored when a publisher wants without legal effect. – Nij Apr 16 at 7:26
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    @grovkin If you were correct, the professor would be violating copyright law by creating a derivative work (the final product) without permissions of the copyright holder of the original works (the students). And even so, the only work for hire would be the specific elements of protectable expression the professor added themselves. Any protectable elements authored by the students and remaining in the final work would still belong to them, meaning their consent would be needed to distribute it. (Else a professor could make his own cut of The Phantom Menace as a WfH and the uni would own it.) – David Schwartz Apr 17 at 23:25

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