Manatt Partner Interviewed on Work-For-Hire Copyright Victory

“Software Programmer Is Employee Even With Gaps in Receipts of Regular Salary”
Bloomberg BNA’s Patent, Trademark & Copyright Law Daily

July 10, 2012 – Bloomberg BNA interviewed Manatt’s Shari M. Wollman, co-chair of the firm’s Intellectual Property Practice, for an article published in Patent, Trademark & Copyright Law Daily. Wollman discussed a recent summary judgment victory for her client, a software development company, and explains what the work-for-hire verdict means for other employers involved in similar copyright claims. In addition to Wollman, the Manatt team included Mark Lee, Don Brown, Adrianne Marshack, Kathrin Wanner, Justin Jones Rodriguez and Seth Reagan.

Bloomberg BNA reports that in Siniouguine v. Mediachase Ltd., a federal district court found that Alexandre Siniouguine, a computer programmer formerly employed by software development company Mediachase, was an employee whose work on a software product constituted a work made for hire under the Copyright Act of 1976, even when there were gaps in the programmer’s compensation. The Court awarded summary judgment in favor of Mediachase, which claimed that the computer program was owned by the company and not the individual programmer.

The Court said that there was sufficient evidence of other forms of compensation to support a conclusion that the programmer was an employee and not a contractor or freelancer who retained copyright interest in the works he developed. Applying standards set forth in Community for Creative Non-Violence v. Reid and Justmed Inc. v. Byce, the Court ruled that Siniouguine’s work was done in the course of his employment and thus belonged to his employer.

Wollman, who was lead counsel to Mediachase, told BNA that this decision might be more significant to employers than a mere ordinary application of the Reid and Justmed balancing tests to the facts.

“It’s tempting at first glance to treat this as another work-for-hire decision in which the employer is victorious,” Wollman said. “But there are many important nuances in this decision that will provide guidance to employers in the future to help them ensure that their works are protected.”

First, Wollman said, while Reid identifies regular monetary compensation as an important factor in determining whether a party is an employee, the instant decision may help establish that some gaps in such compensation do not necessarily sever the employer-employee relationship and also that other forms of compensation may have a significant impact on the balancing test.

Noting that Justmed had found that compensation in the form of company stock might constitute adequate compensation to establish employment, Wollman said that in Siniouguine, “we go even further.”

This decision was “consistent with recent enforcement activity by the Department of Labor,” said Wollman, noting that federal agencies have indicated a willingness to look “carefully at the nature of the relationship” instead of merely “looking at superficial factors.”

Finally, she said it was significant from an evidentiary point of view in that the court ruled as admissions several kinds of actions by Siniouguine, including naming Mediachase as his employer on a variety of applications in financial and other transactions, such as apartment rental applications and automobile lease applications.