Cracking the Code: How to Prevent Copyright Termination From Upending the Proprietary and Open Source Software Markets

By Grant Emrich

Computer software is protected by copyright law through its underlying code, which courts have interpreted as constituting a “literary work” pursuant to the Copyright Act. Prior to including software as copyrightable subject matter, Congress established a termination right which grants original authors the ability to reclaim their copyright thirty-five years after they have transferred it. Termination was intended to benefit up-and-coming authors who faced an inherent disadvantage in the market when selling the rights to their works. In the near future, many software works will reach the thirty-five-year threshold, thus presenting courts with a novel application of termination to computer software.

Software’s inclusion as copyrightable subject matter has long been seen as a poor fit when compared to other copyrightable works, such as music, movies, and art. This perceived difference will soon be exacerbated because termination poses unique threats as applied to software, primarily due to the functional aspects of software that are necessarily incidental to the protected code.

Problems stemming from termination will manifest differently in the two primary software markets known as proprietary software and open source software. Independent contractors may be able to terminate copyrights held in software they had previously written for a business’s proprietary ownership, whereas, in the context of open source software, exercise of termination could make void perpetual licensing agreements that serve as the foundation for the open source movement. While statutory and common law exceptions to termination, such as the work made for hire doctrine, may mitigate the effects of termination, the degree to which the doctrines may do so has yet to be determined.

This Note argues that the harmful effects of termination as applied to proprietary software can be resolved through a novel interpretation of the work made for hire provision of the Copyright Act. Additionally, the harmful effects of termination on open source software can be avoided if Congress adopts a legislative amendment creating a compulsory licensing system for open source works.