Aymes v. Bonelli

• Decision Date: 02 December 1992
• Docket Number: D,No. 82,82
• Parties: , 1993 Copr.L.Dec. P 27,043, 25 U.S.P.Q.2d 1181 Clifford Scott AYMES, Plaintiff-Appellant, v. Jonathan BONELLI, doing business as Island Swimming Sales, Inc.; and Island Recreational, Defendants-Appellees. ocket 92-7098.
• Court: U.S. Court of Appeals — Second Circuit

Page 857

980 F.2d 857

61 USLW 2406, 1993 Copr.L.Dec. P 27,043,

25 U.S.P.Q.2d 1181

Clifford Scott AYMES, Plaintiff-Appellant, v. Jonathan BONELLI, doing business as Island Swimming Sales Inc.; and Island Recreational, Defendants-Appellees.

No. 82, Docket 92-7098.

United States Court of Appeals, Second Circuit.

Argued Sept. 14, 1992.

Decided Dec. 2, 1992.

Clifford Scott Aymes, pro se.

Thomas O'Rourke, New York City (Susan E. McHale, Wyatt, Gerber, Burke & Badie, of counsel), for defendant-appellee.

Before MINER, ALTIMARI, and WALKER, Circuit Judges.

ALTIMARI, Circuit Judge:

Clifford Scott Aymes, proceeding pro se, appeals from a judgment of the United States District Court for the Southern District of New York (Martin, J.) dismissing his complaint alleging, inter alia, copyright infringement. On appeal, Aymes challenges the district court's finding that a computer program he had created for the defendant-appellee Island Recreational ("Island") was a "work for hire" under the For the reasons set forth below, we reverse the judgment of the district court and remand for further proceedings consistent with this opinion.

Copyright Act of 1976, 17 U.S.C. § 201(b) (1988), as construed in Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989).

BACKGROUND

In May 1980, Aymes was hired by defendant-appellee Jonathan Bonelli, the president and chief executive officer of Island, to work as a computer programmer. Island operated a chain of retail stores selling swimming pools and related supplies. Aymes, who received a graduate degree from Cornell University's School of Engineering in 1981, worked with Island's computer systems from 1980 to 1982.

During that period, Aymes created a series of programs called "CSALIB" under the general direction of Bonelli, who was not a professional computer programmer. CSALIB was used by Island to maintain records of cash receipts, physical inventory, sales figures, purchase orders, merchandise transfers, and price changes. There was no written agreement between Bonelli and Aymes assigning ownership or copyright of CSALIB. Aymes does contend, however, that Bonelli made him an oral promise that CSALIB would only be used at one computer in one Island office.

Aymes did most of his programming at the Island office, where he had access to Island's computer hardware. He generally worked alone, without assistants or co-workers, and enjoyed considerable autonomy in creating CSALIB. This autonomy was restricted only by Bonelli who directed and instructed Aymes on what he wanted from the program. Bonelli was not, however, sufficiently skilled to write the program himself.

Although Aymes worked semi-regular hours, he was not always paid by the hour and on occasion presented his bills to Bonelli as invoices. At times, Aymes would be paid by the project and given bonuses for finishing the project on time. It is undisputed that Aymes never received any health or other insurance benefits from Island. It is similarly undisputed that Island never paid an employer's percentage of Aymes's payroll taxes and never withheld any of his salary for federal or state taxes. In fact, Aymes was given an Internal Revenue Service 1099 Non-Employee Compensation form instead of the standard employee W-2 form.

Aymes left Island in September 1982 when Bonelli unilaterally decided to cut Aymes's hours. Aymes considered this to be a breach of an oral agreement he allegedly made with Bonelli. At the time Aymes left, Island owed him $14,560 in wages. Aymes also requested payment for multi-site use of CSALIB. When he became persistent in his demands for compensation, however, Bonelli insisted that he sign a release for his rights to CSALIB in order to receive the back earnings. Aymes refused to sign and was not paid.

On March 12, 1985, Aymes registered CSALIB in his own name with the United States Copyright Office. On March 21, 1985, Aymes filed a complaint against Bonelli and Island in the United States District Court for the Southern District of New York (MacMahon, J. ), alleging copyright infringement under the Copyright Act of 1976 and various state claims.

After a lengthy series of pre-trial motions, the copyright infringement claims were bifurcated from the pendent state claims and the case was reassigned. On September 10, 1991, a bench trial was conducted by the district court (Martin, J.) on the copyright infringement claim with Aymes appearing pro se. On September 24, 1991, the district court found that, contrary to Aymes's contention, Bonelli never agreed to limit Island's right to use or modify CSALIB. The district court further held that Aymes had no copyright over CSALIB because the program was a "work made for hire," which meant that the authorship belonged to Island under 17 U.S.C. § 201(b) (1988). Accordingly, the court dismissed Aymes's copyright infringement claim.

Aymes then filed a motion for reconsideration in light of Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989), which established a multi-factored test for determining whether a party is an employee under the work made for hire doctrine. The court, in an opinion issued on November 6, 1991, addressed the Reid factors and concluded that Aymes was Island's employee. Consequently, the district court adhered to its original decision.

On November 21, 1991, a second bench trial was held on the remaining claims, but the only issue presented by Aymes was his contention that he was entitled to a rescission of his agreement with Island due to Island's failure to pay him the $14,560 it owed him. The district court rejected Aymes's claim for rescission and denied Aymes's additional claims for relief, but ordered Island to pay Aymes $34,549.13 for back pay plus interest.

Aymes now appeals.

DISCUSSION

Under the Copyright Act of 1976, copyright ownership "vests initially in the author or authors of the work." 17 U.S.C. § 201(a) (1988). Although the author is generally the party who actually creates the copyrightable work, the Act provides:

In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.

Id. § 201(b). The Act defines a work made for hire as: "(1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use ... if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire." Id. § 101.

It is undisputed that Aymes and Bonelli never signed a written agreement assigning ownership rights in CSALIB. We must therefore consider whether the program was a work prepared by Aymes as an employee within the scope of his employment. If so, CSALIB qualifies as a "work made for hire" whose copyright belongs to Island as Aymes's employer.

The Copyright Act does not define the terms "employee" or "employment," and, consequently, the application of these terms is left to the courts. In Reid, the Supreme Court addressed the question of when an individual is an employee under the work for hire doctrine. Relying extensively on the legislative history of the Copyright Act, the Court concluded that to "determine whether a work is for hire under the Act, a court first should ascertain, using principles of the general common law of agency, whether the work was prepared by an employee or an independent contractor." Id. at 751, 109 S.Ct. at 2178. The Court then set forth the factors to be used in making this determination:

In determining whether a hired party is an employee under the general common law of agency, we consider the hiring party's right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required, the source of the instrumentalities and tools, the location of the work; the duration of the relationship between the parties, whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party's discretion over when and how long to work; the method of payment; the hired party's role in hiring and paying assistants; whether the work is part of the regular business of the hiring party; whether the hiring party is in business; the provision of employee benefits, and the tax treatment of the hired party.

Id. at 751-52, 109 S.Ct. at 2178-79 (footnotes omitted). The Court noted that no single factor is determinative. Id. at 752, 109 S.Ct. at 2179.

I. Application of the Reid Test

The district court applied the Reid test thoroughly, factor-by-factor. The court's We begin our analysis by noting that the Reid test can be easily misapplied, since it consists merely of a list of possible considerations that may or may not be relevant in a given case. Reid established that no one factor was dispositive, but gave no direction concerning how the factors were to be weighed. It does not necessarily follow that because no one factor is dispositive all factors are equally important, or indeed that all factors will have relevance in every case. The factors should not merely be tallied but should be weighed according to their significance in the case.

                factual findings as to the presence or absence of the Reid factors cannot be disturbed unless clearly erroneous.   See Fed.R.Civ.P. 52(a).   However, the ultimate determination of whether CSALIB was a work for hire is reviewed de novo.   See Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213, 1215 n. 5 (2d Cir.), cert. denied, 409 U.S. 997, 93 S.Ct. 320, 34 L.Ed.2d 262 (1972);  Donaldson Publishing Co. v. Bregman, Vocco, & Conn, Inc., 375 F.2d 639, 641 (2d Cir.1967), cert. denied, 389 U.S. 1036, 88 S.Ct. 768, 19 L.Ed.2d 823 (1968)
                

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