QUESTION

Does our company own software developed by an independent contractor?

The default rule is that the creator of the software (i.e., the independent contractor) enjoys the exclusive right to, among other things, reproduce, distribute, and prepare derivative works based on the software. Companies sometimes attempt to contractually obtain ownership by designating the software as a “work made for hire.” Such designation is ineffective with independent contractors, however, since the U.S. Copyright Act does not include software developed by non-employees as works that can constitute “work made for hire.”

Companies can protect their rights in software developed by independent contractors through properly drafted assignments.