Rouse v. Walter & Associates, L.L.C.
2007 U.S. Dist. LEXIS 70215, 2007 WL 2745615, 513 F. Supp. 2d 1041 (2007)
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Rule of Law:
Under the Copyright Act's 'work made for hire' doctrine, an employer is considered the author and owner of a work created by an employee within the scope of their employment, unless the parties have expressly agreed otherwise in a signed written instrument.
Facts:
- Dr. Gene Rouse and Dr. Doyle Wilson were research professors at Iowa State University (ISU) conducting a large, grant-funded research project on using ultrasound to determine beef quality in live cattle.
- As part of this research, they created a software program called LAIPS and assigned its copyright to the ISU Research Foundation (ISURF).
- To improve the efficiency of their research, Rouse and Wilson directed Dr. Viren Amin, an ISU associate scientist, to create a 'front-end' interface program for LAIPS, which became known as USOFT.
- Amin developed USOFT using university computers and a third-party software tool (VisionTools) that was licensed to ISU for noncommercial, internal use.
- Amin embedded notices in the USOFT program stating '© Iowa State University' and that it was copyrighted by ISURF.
- Rouse, Wilson, and Amin co-authored a research paper published by ISU that described USOFT and stated it was copyrighted by ISURF.
- When ISU's ultrasound lab was transitioned to a private company, Walter & Associates, Wilson provided ISURF with a list of necessary software that included USOFT, and Amin told an ISURF representative that USOFT was 'free to anyone who wants it.'
- Several years later, after forming their own competing company, Rouse and Wilson asserted for the first time that they and Amin were the exclusive owners of USOFT and filed for copyright registration in 2005.
Procedural Posture:
- Dr. Gene Rouse and Dr. Doyle Wilson filed a complaint for copyright infringement against Walter & Associates, L.L.C., in the U.S. District Court.
- Walter & Associates filed an Answer with counterclaims against Rouse, Wilson, and their company, Biotronics, Inc.
- Plaintiffs filed a First Amended Complaint, adding Marvin Walter as a defendant.
- Defendants filed an Amended Answer and Third-Party Complaint, adding Dr. Viren Amin as a necessary party and ISURF as a third-party defendant.
- ISURF and Defendants reached a settlement, and the court dismissed all claims against ISURF with prejudice.
- Defendants filed a Third Amended Answer asserting counterclaims for negligent misrepresentation against Rouse and Wilson, and a third-party complaint with the same claim against Amin.
- Defendants filed a Motion for Partial Summary Judgment seeking dismissal of the Plaintiffs' copyright infringement claim.
- Plaintiffs and Third-Party Defendant filed a Motion for Partial Summary Judgment seeking dismissal of the Defendants' negligent misrepresentation counterclaims.
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Issue:
Does a software program created by university employees, using university resources and licensed third-party software to facilitate their university-sponsored research, constitute a 'work made for hire' owned by the university in the absence of an express written agreement to the contrary?
Opinions:
Majority - James E. Gritzner
Yes. A software program created by university employees within the scope of their employment is a 'work made for hire,' and the university is considered the author and copyright owner. To determine if the work was created within the scope of employment, the court applied the three-factor test from the Restatement (Second) of Agency. First, creating USOFT was the 'kind of work' the employees were hired to perform, as it was developed to directly support and enhance their primary, grant-funded research at ISU. Second, the work occurred 'substantially within authorized time and space limits,' as it was developed and tested on ISU computers with ISU resources, even if some coding was done at home. Third, the work was 'actuated, at least in part, by a purpose to serve the master,' because USOFT's creation was motivated by the need to make the university's research process more efficient. The court rejected the plaintiffs' argument that the ISU Faculty Handbook constituted the express written agreement required by 17 U.S.C. § 201(b) to override the work-for-hire presumption, holding that a general employee policy is insufficient. Because USOFT is a work made for hire, ISU is the copyright owner, and the plaintiffs lack standing to sue for infringement.
Analysis:
This decision solidifies the application of the 'work made for hire' doctrine within the academic research context, affirming a university's strong presumptive ownership over intellectual property created by its employees. It clarifies that faculty research, including the development of tools like software to support that research, falls squarely within the scope of employment. The ruling also sets a high bar for overriding this presumption, indicating that general employee handbooks will likely not suffice as the 'express written instrument' required by the Copyright Act. This case serves as a crucial precedent for universities in asserting ownership of faculty- and staff-created IP and highlights the importance for employees to secure specific, signed agreements if they wish to retain such rights.
