Prior to the Supreme Court's 1989 decision in Community for Creative Non-Violence v. Reid, the Circuits had disagreed over the question of whether independent contractors could qualify as "employees" under the doctrine. The Fifth, Ninth, and D.C. Circuits defined "employee" narrowly, thereby excluding the majority of commissioned works from potential work for hire status. Applying a much broader definition of the term, the Second and Seventh Circuits included virtually all commissioned works as work for hire. The disagreement was not surprising, since the copyright statute does not include a definition of the term, and the legislative history fails to illuminate the intent of the enacting Congress.

The Reid Court resolved the issue, adopting a narrow definition of "employee." Under the Reid test, the work for hire doctrine now excludes many works that might have qualified as work for hire under previous standards. In practical terms, hiring parties that commission work have lost the ability to designate such work as work for hire for all but a few, narrow categories of work.

This Note explores the consequences of this doctrinal shift for the computer software industry. The software industry relies almost exclusively on copyright law for protection of intellectual property rights. In addition, a substantial amount of software is produced by independent contractors. As a result, the industry is particularly sensitive to changes in work for hire doctrine. This Note argues that the change brought about by the Reid Court poses substantial difficulties to the efficient exploitation of computer software.

This Note further contends that the computer software industry differs materially from other industries that rely on copyright law to protect intellectual property. For example, unlike many other industries, independent contractors in the software industry do not appear to need the protection gained by exclusion from potential work for hire status. In addition, excluding the software industry from the work for hire doctrine raises substantial barriers to efficient exploitation of completed works. This Note therefore suggests revising the current work for hire provisions to account for the unique aspects of the industry, allowing software to be included in the class of work that may be considered as work for hire.