Reference no: EM131473117

Question: Iowa Pedigree (IP) wanted to develop software for use in its business of assisting dog breeders and brokers in complying with American Kennel Club licensing and registration requirements. In May 1989, IP asked Gary Harter to develop this program for it. For the next six years, Harter worked on a variety of projects for IP. He developed several computer programs, maintained IP's computers, and serviced the software of IP's clients. Throughout Harter's employment with IP, IP reported his pay to the IRS on form 1099 as payment to an independent contractor. Harter reported the pay as self-employed income. IP did not withhold for income or social security taxes. Harter received payment on an irregular basis, sometimes being paid as often as three times within one month and sometimes going as long as seven months without payment. Harter did not punch a time clock or submit the hours worked to IP except in the form of an invoice.

IP directed the hours and days that he would work. Harter did some work at home but primarily worked at IP's offices, using its equipment. Harter also continued to consult for other companies during his employment with IP. In 1992, Harter hired an assistant to work on a particular project and paid the assistant himself. Harter received no medical, retirement, or vacation benefits from IP. Harter traveled extensively with the owner of IP throughout the six-month period to service clients. Harter attended several trade shows for IP as well, in which he wore an IP "uniform" and worked at the IP booth answering questions regarding IP's services. IP paid for his expenses on these trips. IP directed the projects that Harter worked on, ensuring that the programs would meet licensing and compliance requirements. In 1996, several IP clients terminated their business relationship with IP and began receiving services directly from Harter. IP then sued Harter for copyright infringement, claiming that IP was the sole owner of the copyrights in the programs that Harter had developed for it. Who owns the copyrights in these programs-Harter or IP? What test do the courts apply in resolving issues of this type?