Here’s a story of a company founder leaving the company and the geographical area and starting a new company in the same line of business. It’s not necessarily a story about what not to do. It’s more a story of the legal issues that can arise when the founder creates copyrighted works, assigns the ownership of the copyrighted works to the first company and then creates similar works for the second company. Perhaps the founder could have retained the right to make derivative works, instead of assigning all of his copyright rights to the first company.
David Richison founded the Ernest Group, dba Paycom Payroll, a payroll processing company, in Oklahoma in the 1990s. He wrote two software programs for use at the company and then assigned his copyright interest in the programs to the Ernest Group. Richison left Oklahoma and the Ernest Group. He moved to Maryland and founded Period Financial Corporation, also a payroll processing company. Richison wrote two more software programs for Period. One of the programs was based on a program Richison wrote for Paycom.
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Oracle owns the Java language computer source code. The Application Programing Interfaces (API) contained in the source code consist of declaring code (headers, short statements) and implementing code (instructions for carrying out the declared function). Google copied the Java declaring code verbatim (7,000 lines) and replicated (imitated, but didn’t copy verbatim) the overall structure, sequence and organization (SSO) of 37 Java API packages, but wrote its own implementing code for use in its Android mobile device platform.
Oracle sued Google for copyright infringement. Google argued that copyright does not protect the portions of the Java source code it copied. The Federal Circuit Court of Appeals ruled that “the declaring code and the structure, sequence, and organization of the 37 Java API packages are entitled to copyright protection.” (Opinion pdf page 17). Although there are other issues in this case, this post discusses only the Federal Circuit’s copyrightability analysis.
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