## Facts

- From 1985 to 1993, Thomas A. Cramer worked for Continental Federal Savings Bank (Continental) as a senior vice president and director of information systems, supervising Continental’s computer operations and in-house software development.
- In 1990, Continental decided to provide point-of-sale (POS) services to customers to process credit/debit card transactions and electronic settlement.
- Cramer was responsible for implementing Continental’s POS initiative.
- Cramer wrote an initial version of the POS software largely at home, using his own computers, and spent several hundred hours on the effort.
- Another Continental employee later produced a final, operational version of the POS software using Cramer’s initial version as the starting point.
- Continental later merged with (or was succeeded by) Crestar Financial Corp. and related Crestar entities (collectively, Crestar).
- After the merger, Crestar paid Cramer to transfer the POS system to Crestar’s operations, but Crestar did not employ him.
- Cramer then filed a copyright registration for the POS program in his own name and sued Crestar for copyright infringement based on Crestar’s continued use of the system.
- The district court granted summary judgment to Crestar on the ground that the POS program was a work made for hire owned by Continental (and thus by Crestar as successor), and it awarded Crestar attorneys’ fees and costs.
- Cramer appealed.

## Issues

1. Whether the POS computer program was a work made for hire created by Cramer within the scope of his employment, so that Continental (and Crestar as successor) owned the copyright rather than Cramer.
2. Whether the district court erred in awarding attorneys’ fees and costs to Crestar as the prevailing party.

## Decision

- The Fourth Circuit affirmed the district court’s summary judgment for Crestar.
- The court agreed that the POS program was created by Cramer as an employee acting within the scope of his employment, making it a work made for hire owned by Continental and held by Crestar as successor.
- The court also affirmed the award of attorneys’ fees and costs to Crestar.

## Legal Principles

- Under 17 U.S.C. §§ 101 and 201(b), when an employee creates a work within the scope of employment, the employer is treated as the author and owns the copyright unless a written agreement provides otherwise.
- Whether a work was created within the scope of employment is evaluated under common-law agency principles (often framed by Restatement (Second) of Agency concepts), including whether: (1) the work is of the kind the employee was employed to perform, (2) it was created within authorized time and space limits, and (3) it was created, at least in part, to serve the employer.
- Work connected to an assigned employer project may fall within the scope of employment even if the employee did significant portions at home, after hours, or using personal equipment.
- A successor entity may own and enforce copyrights held by the predecessor employer, consistent with applicable succession principles.
- Attorneys’ fees and costs may be awarded to the prevailing party in a copyright action under 17 U.S.C. § 505 in the court’s discretion, and an appellate court will generally affirm absent error or an abuse of discretion.

## Conclusion

The Fourth Circuit held that Cramer’s POS software was an employee work made for hire because it was created as part of his responsibilities implementing Continental’s POS initiative, so the copyright belonged to Continental and passed to Crestar as successor; the court also affirmed the district court’s award of attorneys’ fees and costs to Crestar.


Cramer v. Crestar Financial Corp., 67 F.3d 294 (1995)