Back-Dated Copyright Assignments
Back-dated or retroactive copyright assignments are quite common. However, in a recent case a Judge of the Federal Court was not prepared to accept the assignment on its face.
The defendant carried on a truck haulage business. It wished to modernize its dispatching and invoicing systems. The defendant engaged the plaintiff, who ran a computer programming business, to implement an electronic system.
The author of the computer programs personally developed them by building on the Microsoft Access database platform. Some of these programs were compilations of multiple modules organized according to function. The software in question consists of the following programs:
a. Petro Dispatch 2000: The primary software used for order inputting, dispatching, post-order reconciliation, invoicing and forecasting delivery requirements.
b. Card Lock Invoicing Program: This program produced the invoices for card lock customers.
c. Railmaster Program: The rail car management section of this program tracked inventory in rail cars, invoiced for time on rail sidings and dispatched bulk products. The dispatch module was for the dispatch of cement, heavy oil products, asphalt and waste oil.
d. Modifications: There were numerous modifications and "add-ons" to enable the software to function for the defendant.
Software licence agreements were entered into relating to the programs. The term of each licence was perpetual. The agreements provided for, among other things, the payment of a "Product and Support and Maintenance" fee and the plaintiff was required to deliver corrections and enhancements to the programs.
The relationship between the parties disintegrated. The plaintiff took the position that the defendant was in default of its licence obligations and attempted to disable the programs. The defendant engaged a third party to undo the plaintiff’s attempts to disable the programs and to provide continuing support relating to the programs.
The plaintiff brought an action against the defendant alleging copyright infringement. Eventually the defendant replaced the programs with new programs created by other suppliers.
The Subsistence of Copyright in the Programs
In the action the defendant challenged the subsistence of copyright. The Trial Judge referred to paragraph 34.1(1)(a) of the Copyright Act, which creates a presumption that copyright subsists in the work unless proven otherwise.
The Trial Judge concluded that packaging together with the specific sets of user inputs, dispatching, forecasting, reconciling and invoicing tools was original and was compiled with the requisite degree of skill and judgment. On this basis, copyright subsisted in some but not all of the programs.
The modifications, which are "fixes" to included features allowing them to function in the manner originally intended, were not entitled to separate and additional copyright protection on their own. The "fixes" were trivial, not original, and dictated by the Microsoft Access program and functionality.
The Ownership of the Copyrights
Paragraph 34.1(1)(b) of the Copyright Act provides that in any proceeding for infringement, where the defendant challenges the existence or title of the copyright, the author of the work is presumed to be the owner unless proven otherwise. There was no issue concerning who was the author of the programs in issue.
The plaintiff relied on a nunc pro tunc assignment of copyright from the author to the plaintiff that gave retroactive effect to the assignment. The evidence of the author was that the assignment occurred in his mind at the retroactive date of the assignment. The Trial Judge categorized the evidence as a purely a self-serving attempt to avoid the problems arising from the fact that the author was not a party to the action.
The Trial Judge concluded that reliance on such an assignment required evidence as to the intention of the assignor concerning the purpose and effect of the assignment. In addition it was observed that an assignment must be in writing to be effective. The evidence presented was insufficient to support the inference that a valid assignment was made as of the retroactive date. As a result the plaintiff did not own the copyrights in issue and could not succeed with its action for infringement.
While the Trial Judge accepted the author’s evidence concerning the creation of the programs in issue, the author was categorized as being an unsatisfactory witness who was also responsible for the overreaching actions of the plaintiff. In addition, the author choose not to be a party to the action with personal exposure for claims for costs. No doubt these factors influenced the Trial Judge and are specific to this case. However, the decision needs to be carefully considered by anyone who is relying on a a nunc pro tunc assignment of copyright.