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Free «Business Law Case Analysis» Essay Sample

Introduction

In a wake of rapid development of information technologies the issue of copyright ownership becomes increasingly important. This paper is an attempt to outline the Supreme Court case which has important implications for copyright ownership issues in general and for IT companies in particular.

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Case Background

James Earl Reid is a sculptor who received an order from the non-profit organization the Community for Creative Non-Violence (CCNV) to make sculptures depicting homeless American People. In a couple of months Reid delivered the sculpture to the CCNV. A month later, the sculpture was returned to Reid in order to maintain minor repairs. In a couple of weeks CCNV was making plans to take the sculpture on a tour for fundraising purposes. However, Reid objected: he insisted that the material from which the sculpture was made is not strong enough to survive touring. Reid further refused to return the sculpture to the CCNV. Then the artist filed a certificate of a copyright registration. CCNV immediately filed a competing certificate for a copyright registration. CCNV then brought an action against Reid seeking the return of the sculpture and an identification of copyright ownership. The District Court ordered to return the sculpture to the CNNV. Furthermore, the District Court found that the sculpture represented a “work for hire” under the section 101 of the Copyright Act. In particular, the court considered Reid as an employee of the CNNV within the meaning of the section 101 (1) of the Copyright Act. The court explained that the CNNV was the main force motivating the creation of the sculpture. The Court of Appeals reversed the District Court decision, holding that Reid possessed a copyright of the sculpture. The Court of Appeals pointed out that according to the literal interpretation of the section 101 (1) of the Copyright Act, the sculpture cannot be regarded as a “work for hire”. The court explained that Reid should be seen as an independent contractor rather than an employee. At the same time the court made a reservation that “the sculpture… may have been jointly authored by CCNV and Reid” (Community for Non-Violence v. Reid- 490 U.S. 730 (1989)). The Supreme Court of the United States affirmed the decision of the Court of Appeals. In other words, the Supreme Court held that the sculpture was not a “work for hire”. In particular, the Supreme Court explained that the term “employee” should be regarded in the context of “the conventional master-servant relationship” (Community for Non-Violence v. Reid- 490 U.S. 730 (1989)). The court pointed out that nothing in the language of the section 101 suggests that the Congress by introducing the term “employee” intended to refer to anything other than the traditional relation of employer and employee (Community for Non-Violence v. Reid- 490 U.S. 730 (1989)). Therefore, the Supreme Court reached the conclusion that the language of the section 101 does not allow to view the Reid’s work as a “work for hire”. 

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Current Implications of Case

By its decision in Community for Non-Violence v. Reid- 490 U.S. 730 (1989) the Supreme Court resolved a long lasting split in the courts concerning the definition of the term “employee” and the term a “work for hire” (Perwin, 1989). In other words, the Supreme Court provided guidance on the way in which the section 101 of the Copyright Act should be interpreted. The Supreme Court established a very important principle: a copyrightable work of an independent contractor cannot be regarded as a “work for hire”. Such a principle can have various implications for companies. For instance, Morris (1990) suggests that under the Community for Non-Violence the creative commissioner who “conceives of an idea in highly specific detail, and then supervises and controls the expression of his idea by one hired… in a tangible form” is unable to establish any right in copyright ownership. In simple terms, the creative commissioner loses all his rights as far as copyright ownership is concerned. The case also has important implications for employers who resort to unconventional forms of employment – leasing employees, outsourcing employees and so on (Windle, 2010). For such employers the decision in Community for Non-Violence v. Reid- 490 U.S. 730 (1989) means that they should be aware that the work done by an outsourced employee constitutes his or her copyright. Thus, an employer should get an authorization for use of the copyrighted work according to the Copyright Act. Clearly the principle established by Community for Non-Violence v. Reid- 490 U.S. 730 (1989) brings a need to clarify the status of an outsourced employee in the outsourcing agreement (Scott, 2006).

Future Implications of Case

 
 
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In order to see the future implications of the case, one should regard the decision in the Community for Non-Violence v. Reid- 490 U.S. 730 (1989) in the context of information technology laws. In our era information technology plays an important role and it will continue to do so in the future. The principles established by the Community for Non-Violence v. Reid- 490 U.S. 730 (1989) apply to the cases involving copyright in the software. It is well-illustrated by Aymes v. Bonelli. In this case, Bonelli hired Aymes to create computer software for his company. Aymes did the programming mostly in Bonelli’s company office. However, he worked semi-regular hours and was not paid hourly. After some time, Aymes left Bonelli’s company and registered his programs as copyright. Then Aymes sued Bonelli for copyright infringement. In order to determine whether it was a work for hire the court applied the test developed by the Supreme Court in Community for Non-Violence v. Reid- 490 U.S. 730 (1989). At the same time, judge Altimari pointed out that the test developed by the Supreme Court “consists merely of a list of possible considerations that may or may not be relevant in a given case” (Aymes v. Bonelli, 1992). Overall, in Aymes v. Bonelli the court found that Aymes work was a work for hire since the programmer received a substantial contribution from Bonnelli’s company, and work under programming conditions defined by the company. However, the main thing is that Aymes v. Bonelli how the principles established by the Community for Non- Violence v. Reid- 490 U.S. 730 (1989) can be applied in information technology cases.

Personal Opinion of Case

It seems to me that to certain extent Community for Non-Violence v. Reid- 490 U.S. 730 (1989) gives artists and creators more favourable treatment compared to businesses. By virtue of the principle established by this case businesses have to pay more attention to contract drafting. In particular, they introduce provisions according to which copyright ownership should be vested in them rather than in an independent contractor. Furthermore, businesses should make efforts to pass the work for hire test developed by the Supreme Court. In a word, businesses should be extremely careful in order to protect their rights in copyright ownership in the works created by outsourced workers, independent contractors, and freelance workers, etc. Also the way the courts apply the test elaborated by the Supreme Court brings a great deal of uncertainty. Indeed, in Aymes v. Bonelli the court points out that it is very easy to misapply the test. Overall, from my point of view, Community for Non-Violence v. Reid - 490 U.S. 730 (1989) deteriorates the protection of rights of companies in copyrightable works created by non-traditional employees.

Conclusion

To sum up, Community for Non-Violence v. Reid- 490 U.S. 730 (1989) established a principle that an independent contract has a copyright of his work is. The court also developed a test for making a distinction between an employee and an independent contractor. One of the implications of the Community for Non-Violence principle is that the creative commissioner who conceives the idea and elaborates it in details may not establish his rights in copyright ownership. The case also will have important implications in future development of the international technology law. The courts have already applied the Community for Nonviolence in cases involving the creation of software. Therefore, IT companies as well as any other businesses should be careful in maintaining relationships with those who create software. Personally, I think that Community for Non-Violence v. Reid- 490 U.S. 730 (1989) brings potential imbalance between a company and the creator of the work.  

   

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