Work for Hire – a Double Standard

May 29th, 2013 Leave a comment
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Work for Hire

Usually, ownership of every work of original authorship lies with the person that created it. The exception is the “work for hire” rule. This covers any collective contributions to most projects. That can include a part of a television or motion picture, combined input to maps, textbooks or supplement materials, individual authors of articles in magazines and newspapers; work commissioned for an anthology. Most important for discussion for this site “work for hire” status also includes all coding and design done for a software application.

The Current Business Environment

Software developers recognize developing an Intellectual Property needs a dedicated team. They see their work as a contribution rather than a piece of authorship unto itself. The software industry, after the early success of the pioneers, has done nothing to dissuade this logic, making sure developers have fewer rights than any other creative workers. This deliberate deception stems from the facts that not only are finished forms of software applications copyrightable, but the technologies used to develop them are often patentable as well. In other words, while developers don’t recognize their work as art, the Law affords both protections of art and science invention to their finished product.

Historical Precedence

Work for hire has long granted exclusive ownership of the commissioned project to the person that paid for the job. That has been a long-standing tradition for centuries since the famous stained glass and elaborate paintings and statuary that adorn the great cathedrals of Europe. However, we know who painted those magnificent murals, who composed a particular grand symphony, or who wrote the prose of an epic novel. This comes from legal standing that while the commissioner of the project owns the work, the creator still has “moral right” to of acknowledgment as author of the completed finished form. Thus, the relationships between benefactor and artist worked since the Renaissance and before. Patrons proudly sponsored creative people in various artistic efforts to enjoy the sole benefit of their creations. Software developers cannot claim credit for works of authorship that arguably take as much creative talent, if they are coded properly, as many of the most imaginative pieces of artistic work in the world.

Astride a Legal Fence between Patent and Copyright

If software developed holds a patentable technology, developers lose rights to use any techniques that they pioneered to make the application, unless they want to pay licensing fees to the company that commissioned the work. Few artists could survive in if every time they developed a style of painting or new type of music, they were forced to abandon their technique for future use. Lastly, exclusive ownership of that technology developed for any software application lies with the contracted owner 99+ years, depending upon the terms of the agreement. This is longer than any other copyrightable work, which protects sole ownership with the commissioned owner of the work for 35-70 years depending on the terms of contract.

Other works of artistic expression only carry a limited transfer of copyright from the original author. After 40 years copyright transfer may be terminated and royalty rights returned to the author and the author’s descendants up until the author’s life +70 years. Software developers enjoy no such protection. Once ownership of code is transferred to the “owner” all rights of the developer are terminated. That includes work they develop outside the standard “work for hire” environment if they sell their rights to a larger firm. Of course considering the life-cycle iterations of software, termination of “ownership” would have to come much sooner for them to be of benefit to the original developer.

Public Attitude

Historical reasons exist for this classification, as the Public and Legal forums see software development as more of a utilitarian than other Intellectual properties. That means many people, even software developers, think of programming code as functional rather than artistic, much like the leg of a table holding up a table top for a carpenter. While other works of authorship find their way to shelves or are displayed on walls, there are many reasons software developers cannot publish “work for hire” code. First, the firm they work for owns the exclusive rights of ownership involved in a ” for hire” project. Second there is much secrecy involved with most development code that is ensured by iron clad confidentiality agreements. Finally, public sentiment still does not yet take coding seriously as a work of creative inspiration, not even it its final form, so there is no impetus to change.

The Past does not Reflect What is Coming

Most people will scoff at the need for developers receive any more earnings from their works of creative inspiration, pointing to such firms as Microsoft, Google and Facebook whose original developers are billionaires. Even developers are complacent. A great demand exists for software developers with current levels of industry growth and despite growth of outsourcing, it seems demand will not subside for decades. There is a rampant misconception that most other forms of artistic expression find it harder to achieve financial success than coding. While true about the past, the same digital age that developers helped bring is quickly catching other artists up to the level of demand that developers enjoy. Contentment with the status quo keeps creative people in software development from realizing what is coming down the pike. Outsourcing is further eroding that unequal playing field as more and more developing countries train top flight software developers and engineers. Of a nearly 600 billion-dollar industry, less than 40% of the developed code comes from North America as of 2012 according to industry analysts—that percentage has been dropping at a rate of 1-2% a year.

Since software is both copyrightable and patentable most Developers will never earn another penny from the work they have already done. They can run with the software industry until the ramped up demand runs out, or negotiate a fairer system such or royalties or a kill fee and accept lesser salaries in the short-term. While this would reduce earnings short term it would preserve steady long-term earnings. The potential also exists to increase the quality and innovation in the marketplace if developers earn a share of the net earnings from the product that they develop. One day this might not seem more odd than a traditional profit sharing plan, and can actually encourage the creativity and innovation that can drive a software development firm to greater heights.

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