How Are Rights in Software or Website Assigned?

The word “assignment” means a transfer of all the rights a person owns in a piece of property. So whenever a person or entity transfers all the intellectual property rights it owns in a work of authorship, such as software or a website, the transaction is usually called an “assignment” or sometimes an “all rights transfer.” An assignment of a copyright or patent must be in writing to be valid.

When such an assignment transaction is completed, the original intellectual property owner no longer has any ownership rights at all. The new owner—the assignee—has all the rights the transferor formerly held. Unless the work involved has been patented (a rare situation), you’ll normally use a copyright assignment to transfer ownership to others or obtain ownership of others’ software or Web content. Such an assignment need not be a lengthy or complex document.

Assignments by Employees

Absent an assignment of rights to an employee’s work-related inventions and other developments, the employer may not own what the employee creates. Or, at the very least, the employer may be subject to a costly and bitter legal fight over ownership rights. An employee may assign his ownership rights in any copyrights, trade secrets, patentable inventions, or “mask works” (semiconductor chip designs) he creates on the employer’s behalf before he actually commences work. This is when an assignment ideally should be made—before an employee begins his job. If an assignment is executed long after an employee is hired, the employer must give the continuing employee a raise or other compensation to ensure that the assignment is enforceable.

To help avoid these types of shenanigans, many high-tech employers require inventive employees to agree to assign copyrightable or patentable works they create after the employment relationship ends. Such postemployment assignments are enforceable in most states if they are reasonable. To be reasonable, a post-?employment assignment must:

  • be for a limited time—probably no more than six months to one year after employment ends;
  • apply only to works that relate to the inventor’s former employment; and
  • apply only to works actually in existence, not to mere ideas or concepts in the employee’s brain.

Assignments by Independent Contractors

Any person or company that hires an independent contractor to create, or contribute to the creation of software or websites should always require the contractor to a sign written agreement assigning his or her copyright ownership to the hiring firm. To ensure that such an agreement will be effective, it should be signed before the independent contractor begins work on the project.

EXAMPLE 1: AcmeSoft hires Dana, a freelance software engineer, to help create a new Web application. Dana is not AcmeSoft’s employee. AcmeSoft has Dana sign an independent contractor agreement before commencing work. The agreement contains a provision whereby Dana assigns to AcmeSoft all his ownership rights in the work he will perform on the application. Dana completes his work and his relationship with AcmeSoft ends. Because of the signed agreement, AcmeSoft owns all the copyright in Dana’s work.

In the absence of such an agreement, the contractor could end up owning the copyright in the work, even though the hiring firm paid for it.

EXAMPLE 2: Assume instead that AcmeSoft hires Dana, but fails to have him sign an independent contractor agreement transferring his ownership rights. When Dana completes his work he, not AcmeSoft, will own the copyright in the work he created for AcmeSoft. This is so even though AcmeSoft paid for it! However, AcmeSoft would be at least entitled to use the work.

Learn more about Patent, Copyright, and Trademarks.

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