The 3 Big Mistakes Companies Make Regarding Originality Of Copyrightable Works

When it comes to avoiding these traps, good intellectual property counsel is essential.

Sometimes a little diligence goes a long way.  Whether a company is hiring employees to develop website content or a new programmer to assist a software development team, such companies need to be careful not only during the hiring process, but as part of its quality assurance and compliance process. These new hires perform an invaluable task — the creation of works for the benefit of the company.  That said, what these individuals may bring to the table (and serve up on it) deserves careful consideration, and for reasons that are more important to the value of the company’s intellectual property than you may think.

When it comes to the development of original works, I have seen enough problems to know that what one company believes is an original work may not actually meet that standard.  Of course, most companies do not willingly hire individuals with the intent of exploiting works they have already created for another company (a tactic that smells a lot like intentional copyright infringement, not to mention potential misappropriation of trade secrets depending on the facts… but to each his own).  Instead, most seek to take advantage of their prior experience (i.e., what they may have learned in the process of their career) so that the company can legitimately exploit their knowledge base for its benefit.

When it comes to copyrightability of works, the Copyright Act specifically requires an “original work of authorship” that is “fixed in a tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 U.S.C. Section 102(a).  For the purposes of this article, I am focusing on the originality component.  Originality is foundational to copyright — at its core, it must be something newly created by the author of the work, as opposed to something copied from another.

Oddly, such originality does not require “novelty” — the copyright standard is different than the “non-obviousness” standard under patent law.  A copyrighted work can resemble another work so long as the similarity is superficial and not the result of copying, and reflects at least come modicum of creativity.  This is an important point — a work can be “independently created” by a author that resembles the work of another author, but may not infringe the other author’s work.  Here is where companies start getting tripped up if they are not careful, and it starts with their hiring practices and oversight.

I know what you are thinking — the employment process should have specific steps to address not only what new employees bring to the table but what independent contractors offer as well (whether within employment handbooks or applicable employment and consulting agreements).  Moreover, independent creation weighs in the company’s favor if the new hire was not exposed to other works (i.e., a competitor’s software code). The reality, however, is that not every company runs these traps — entrepeneurs and “young” companies in the early stage of their corporate evolution tend to not focus on these protections.  In fact, I have even seen well-established companies misstep during the on-boarding process, or otherwise take the appropriate on-boarding steps but fail to follow through on oversight and compliance, finding themselves embroiled in copyright litigation as a result.

There are a multitude of ways this happens, but most common ways companies get trapped involve these three categories:

Assuming the Origins of “Original” Works.  In most cases, the employment onboarding process should require new hires to address “prior works” that may be used by the new company, or otherwise represent that no prior works will be used.  Sadly, many employers simply rely upon the representations of the new hire and only take steps to address potential problems when the new hire is being hired away from a competitor.  Worse, I have seen agreements designed to address prior works be mishandled and exhibits to address such works left blank.

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Assuming the Originality of “Original” Works. A natural extension of the above point, whether the new hires are creating “original” works requires more than representations and other contractual obligations.  Most companies will be assigned copyrightable works created by the employee (either under the work-forbore doctrine or via direct assignment); however, that assumes the works are original. Whether such hires are creating original works requires proper oversight and compliance processes.  If anything, companies cannot simply assume that the originality prong will be met.

Assuming New Employees are “Clean.”  Sometimes, new employees may not be using prior works, but have “residual know-how” from prior employment that can cause problems. I am not talking about general residuals here, but residual know-how that is potentially covered under confidentiality agreements with prior employment.  This is not limited to employees, but independent contractors as well — many consulting agreements contain language that prohibits the use of residual know-how obtained during an engagement from being used in another engagement if such know-how involves confidential information.  As you can appreciate, the scope fo such know-how is rarely clear cut, and almost always invites problems if not properly addressed.

I realize that there are other elements here that some may find equally important (such as clean rooms in the software environment to ensure independent creation, etc.), but my point here is to help bring attention to areas where problems commonly occur due to a lack of attention to detail as well as overall employment diligence.  When it comes to avoiding these traps, good intellectual property counsel is essential.  Companies should take the time to involve intellectual property counsel in both hiring practices as well as compliance with employment requirements.  Doing so not only helps the company clean up its employment practices, but ultimately strengthens the company’s intellectual property in the long run.  This result may not reek of originality, but getting there definitely requires at least a modicum of it.


Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.

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