U.S. Auto Parts Network v. Parts Geek

In determining whether work by an employee is “work for hire,” the employer must prove that (1) it is the kind of work the employee is employed to perform (2) it occurred substantially within the authorized time and space limits, and (3) it was actuated, at least in part, by a purpose to serve the employer.

U.S. Auto Parts Network (“USAP”) brought suit against Parts Geek and computer programmer, Lucas Thomason. In 2006, USAP acquired Partsbin, a company owned by the same individuals behind Parts Geek. Thomason created the e-commerce software (“Manager”) used by Partsbin and by USAP after the acquisition. Thomason worked for USAP until 2008, when he resigned to work for Parts Geek, creating another e-commerce software program. USAP sued for copyright infringement of the Manager software. The district court granted summary judgment to Parts Geek, concluding that USAP did not own the copyright and lacked standing to bring the infringement suit. On appeal, the Court applied a three-prong test to determine if the updates to Manager after USAP acquired Partsbin and hired Thomason were created within “the scope of employment,” and thus owned by USAP. The Court concluded that a reasonable jury could determine that the updates (1) were the kind of work Thomason was employed to perform, (2) occurred within authorized work hours and space limits, and (3) were actuated in part by a purpose to serve Partsbin and USAP. In determining who owned the license, the Court also analyzed whether USAP had an implied license over the derivative changes to Manager. First, the Court concluded that a genuine issue of material fact existed as to whether Thomason’s “conduct created an implied license to Partsbin, USAP, or both, to use” Manager in later developments. Second, there must be a non-trivial change to the original work, and the Court concluded such changes were made during Thomason’s employment with USAP. REVERSED in part, VACATED in part, and REMANDED.