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My full-time employer, the owner of the company was my friend,

asked if I could develop...
My full-time employer, the owner of the company was my friend, asked if I could develop an application for the company. I did so apart from my regular job, away from work, at home online. No agreement was made. I did it on my own, designed and developed it without any collaboration. I met with the owner when it was close to finished and gave him an invoice, we agreed on a price I would be paid for the work, and some additional tasks that would be done to it, and he was satisfied. I did the tasks and he asked for even more work on it - but refused to pay more or pay at all if it was not done - I did the extra work.. He requested it be publicly released in time for a trade show where he launched it and displayed it. I released it. I gave him my invoice again and he said it would be paid in 30 days or less. 17 days later I asked if he could check on its statis because I needed the money. Two days passed after that and he finally met with me and told me that he would not pay for the app under the current terms of my invoice which states: Non-exclusive software license, I retain the source code, He has exclusive control over the application as delivered ad-infinitum. Delivery to be done via public release on Apple Appstore. He now demands that he be given the source-code and exclusive ownership of the program or he will not pay for it and I am certain is going to make my regular employment very uncomfortable. All of the discussion we had was done between me and the owner exclusively, no one else was ever involved and no contracts were ever signed.. but I released it publically and not until 17 days later after its release am being told that he will not pay.. I'd think if he had a problem with it he should have at least said so immediately. So for 17 days the app has been available - he got the product. But now refuses to pay. What do I do?
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Answered in 3 minutes by:
6/19/2013
Dimitry K., Esq.
Category: California Employment Law
Satisfied Customers: 41,221
Experience: Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
Verified

Thank you for your question. Please permit me to assist you with your concerns.

How much does he currently owe you from the balance? I am also assuming that he wasn't your employer but a third party, correct?

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socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 39,498
Experience: Retired
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Hello,

Different contributor here. Please permit me to assist.

Based upon what you have described, the issue boils down to whether or not you work as a software developer for your employer during your regular employment.

If you do, then pursuant to the U.S. Copyright Act section 101, your work is a "work made for hire," and the employer owns the copyright, regardless of whether or not you are the sole creator of the application. In return, your employer owes you wages for your hours of employment, or salary, if you are salary exempt under California law as a software developer (paid at least $39.90 per hour).

If you are not employed as a software developer for your employer, and you used all of your own equipment and developed the application during your non-working hours, then you are an independent contractor and since there was no written agreement, then under the U.S. Copyright Act you own the copyright, which means that while you may have given the employer an implied license for one copy of the software, you have not necessarily licensed the work for distribution to third parties.

This further means that you are entitled to sue the employer for copyright infringement.

That's the good news. The bad news is that a copyright lawsuit must be brought in U.S. District Court. There is no "small claims action" available. You will need to hire a copyright litigation attorney and let him/her handle the case -- because this is the farthest thing from a "do-it-yourself" legal action that exists.

For a competent copyright litigation attorney referral, see this link.

Note: you must also register the software application with the U.S. Copyright Office. Otherwise, the court will dismiss the case, or stay it until you do file -- and you will not be entitled to statutory damages (which can be $750 per unauthorized copy, regardless of actual damages).

Please let me know if I can be of further assistance.
socrateaser
socrateaser, Lawyer
Category: California Employment Law
Satisfied Customers: 39,498
Experience: Retired
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Thank you for your post. Your original contributor here.

There are other considerations.

I do agree that if your position or your general skill set with your current employer is similar to what you created by yourself, the source code and the intellectual property belongs to the employer since the work is still based on the subject matter and what your employer would have reasonably expected from you as part of your employment. However, if there was an agreement in place permitting you to code on your own or create your own applications or programs not directly related to the employer's business or your position, then you likewise can own the product.

The reason I brought up the amount you are owed is because what this also comes down to, other than whether this is a 'work for hire' or if it is even an application that belongs to you is that it is a potential breach of contract claim. That can be pursued in either small claims or district court depending on the amount you were promised but not paid. It may become a situation where you would need to go to federal court, but from your facts that is not yet apparent, and you may be able to resolve this without complicating this issue to the extent the other contributor alluded to, and resolve it directly as a pure contract matter.

Please take care.

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Hello again,

A breach of contract claim in state court, whether small claims or otherwise, without also claiming copyright infringement, would make it impossible to later bring an infringement claim on the same transactions or occurrences, because you would have failed to plead the copyright claim in your contract action.

The only court in which you can bring both actions is U.S. District Court -- and since the copyright infringement action is worth enormously more than the contract action, it would be a huge mistake to sue on the contract and not for the infringement.

Of course, if you are an employee, due to your scope of regular employment, then there would be no copyright infringement claim. But, if you are an employee, then you can file a complaint with the Division of Labor Standards Enforcement (DLSE) for wages and overtime (or just wages if you are salary exempt) -- and the DLSE hearing officer would handle the case much more effectively than any small claims court could, because this is the core of DLSE legal proceedings. Whereas small claims courts in California rarely, if ever hear employment wage claims.

For info on filing a DLSE wage claim, should you decide that this is the appropriate route, see this link.

Please let me know if I can be of further assistance.

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socrateaser
socrateaser
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