PERSONAL PROPERTY -- Computers (authority to copyright programs); (authority to market programs) -- Disposition of (authority of school district to sell computer programs)
SCHOOL DISTRICTS -- Personal Property (authority to copyright computer programs); (authority to sell computer programs); (authority to release copyright) -- Powers and Duties (authority to market computer programs; (authority to sell computer programs); (authority to release copyright)
EDUCATION LAW, §§1709(a), 2503(1),(6); 17 USC §§101, et seq.: A school district may obtain a copyright on a computer program developed by an employee of the school district.
STATE CONSTITUTION, ARTICLE VIII, §1; EDUCATION LAW, §2511: A school district may sell its rights to a computer program if the board of education deems the sale to be in the best interest of the school district and receives adequate consideration.
This is in reply to your letter concerning the ability of a city school district to copyright computer programs developed by employees of the school district. Specifically, you ask:
1. May a school district obtain a copyright for computer programs developed by school district employees?
2. May a school district obtain a copyright on such a computer program if the employee is paid from funds derived from a federal program?
3. May a school district sell its copyright or other ownership rights to the computer program with or without consideration? If consideration is required, must the consideration represent the fair market value of the program or may it represent the cost of developing the program?
Initially, we note that although the Federal Copyright Act (17 USC, §§101, et seq.) recognizes that copyright protection is available for computer programs, the extent of this protection for certain types of programs is not entirely settled (17 USC §§101, 102 117; see 70 ALR Fed 176). Consequently, we must emphasize that our discussion of the issue of copyright protection is general in nature and is not intended to determine whether a particular computer program may be copyrighted.
Your first question involves the provisions of the Federal Copyright Act concerning a "work made for hire." Under 17 USC §101, a "work made for hire" is:
There is a rebuttable presumption of copyright ownership by the employer in the case of works produced for hire (Baltimore Orioles, Inc. v Major League Baseball Players Ass'n, 805 F2d 663 [7th Cir, 1986]; Marshall v Miles Laboratories, Inc., 647 F Supp 1326 [ND Ind, 1986]). Under 17 USC §201, the "[c]opyright in a work protected under this title vests initially in the author or authors of the work," and "[i]n the case of a work made for hire, the employer ... 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."
The cases considering the applicability of the "work made for hire" doctrine examine factors such as the scope of employment, the employer's right to supervise, direct, and exercise control over work, and the nature of the compensation received in determining whether a work was made for hire (see, e.g., Town of Clarkstown v Reeder, 566 F Supp 137 [SD NY, 1983]). Since public property generally may not be used for private purposes (NY Const, art VIII, §1), it is doubtful that a program developed by a school district employee would not be a "work made for hire". Therefore, assuming that the computer program is a "work made for hire," and no collective bargaining or other lawful agreement provides otherwise, it would appear that the school district may obtain a copyright on the computer program prepared by a school district employee (see Education Law, §§1709, 2503, ).
Your second question concerns the school district's authority to copyright a computer program developed by an employee who is paid from funds derived from a federal program. The answer to this inquiry depends, in large part, on the requirements of the federal program in question. Since you did not identify the federal program and did not set forth any of its provisions, we can only generally note that the requirements of the federal program will affect the determination whether the employee is, for purposes of the "work made for hire" provisions, an employee of the school district. For example, an employee may be more likely to be considered a federal, rather than school district, employee if the federal funds used to pay the employee retain their identity as federal funds (see Kradjian v City of Binghamton, 104 AD2d 16, 482 NYS2d 89, motion to dismiss appeal granted 64 NY2d 1039, 489 NYS2d 1029; 1987 Opns St Comp No. 87-9, p 15; 1974 Opns St Comp No. 74-1321, unreported; 1974 Opns St Comp No. 74-1120, unreported). It must also be noted that, since copyrights are transferable and the United States Government is not precluded from receiving and holding copyrights transferred to it, the terms of the federal program could provide that copyrights arising from work funded by the program are to be held by the United States Government (17 USC §§105, 201[d]).
Your third question asks whether the school district may convey its rights to the program, with or without consideration and, if consideration is required, what constitutes appropriate consideration. Article VIII, §1 of the State Constitution prohibits a school district from making gifts or loans of its property to or in aid of private individuals, corporations, associations or undertakings. Therefore, article VIII, §1 would prohibit the school district from transferring its rights to the program to a private party without consideration or for nominal consideration (see Van Curler v City of Schenectady, 59 Misc 2d 621, 300 NYS2d 765).
Under section 2511 of the Education Law, the board of education has the authority to sell unneeded personal property of the school district when the board deems the sale to be for the best interest of the school district. There is no statutory requirement that the property be sold at public sale (15 Opns St Comp, 1959, p 115). It has been held, however, that, while the method of sale chosen is within the sound discretion of the governing board, local officials have a fiduciary duty to secure the best possible price obtainable in their judgment, or the most beneficial terms in the public interest (Ross v Wilson, 308 NY 605; Orelli v Ambio, 41 NY2d 952, 394 NYS2d 636; Davis v Board of Education, 125 AD2d 534, 509 NYS2d 612; New City Jewish Center v Flagg, 111 AD2d 814, 490 NYS2d 560, affd 66 NY2d 980, 499 NYS2d 395; Merrit v Gallagher, 96 AD2d 933, 466 NYS2d 381; 1986 Opns St Comp No. 86-78, p 124). Accordingly, it is our opinion that the method of selling the school district's rights to a computer program and the determination of the price for the property to be sold are, in the first instance, matters within the discretion of the school board, subject to the general principles discussed above.
January 6, 1989