Avtec Systems, Inc. v. Peiffer
21 F.3d 568 (4th Cir. 1994)
Peiffer was hired by Avtec to
write computer programs involving satellite orbits. He came up with the
idea for a new program and wrote it up into a beta version (aka the
Peiffer later worked form
home, on his own time, and upgraded the program into the "2.05
Peiffer secretly sold the
2.05 version to a competitor (Kisak-Kisak), who then sold it to clients
and gave Peiffer lots of money.
When Avtec found out about
this, they registered a copyright on the .309 version, and sued Peiffer
and Kisak for misappropriate of a trade secret. Peiffer countersued for copyright
Avtec argued that Peiffer
wrote the 2.05 version while employed at Avtec, therefore it was a work
for hire, and Avtec owned it.
Peiffer argued that 2.05
version was not created within the scope of his employment, and so it was not work for hire.
The Trial Court found for
Peiffer on the copyright claim, and Avtec on the trade secrets claim.
Basically, the Court found
that since the 2.05 version was written on his own time, it belonged to
Peiffer. However, he made it using the .309 version, which was Avtec's trade
The Appellate Court vacated
The Appellate Court looked
to Community for Creative Non-Violence v. Reid (490 U.S. 730 (1989)), which said that there
were a number of factors that needed to be weighed to determine if
someone was an employee.
See also Restatement
(second) of Agency §228, which said
that a servant's conduct is within the scope of employment only if:
It is of the kind that he
is employed to perform
It occurs substantial with
the authorized time and space limits
It is actuated at leas in
part, by a purpose to serve the master.
The Court found that the
program "was work of the type for which Peiffer was hired," but
that Peiffer "created the program outside the time and space
constraints of his employer," and was not "motivated by a
purpose to serve Avtec."