## Facts

- Wm. M. Mercer-Meidinger-Hansen, Inc. (Mercer) provided compensation consulting services and marketed job-evaluation software.
- Barry MacLean worked for Mercer and serviced Mercer’s client, the New York Stock Exchange (NYSE).
- In 1985, MacLean left Mercer as a formal employee and began operating through MacLean Associates, Inc., but continued servicing the NYSE account as a paid consultant; he worked from his own office and retained substantial control over how he performed the work.
- In 1986, MacLean created JEMSystem (a PC-based job-evaluation spreadsheet program) for the NYSE engagement and provided copies to the NYSE and to two Mercer employees in connection with that work.
- Mercer later incorporated JEMSystem into its own systems (JES and then CompMaster) and marketed CompMaster to other clients.
- MacLean obtained copyright registration for JEMSystem and claimed Mercer infringed by incorporating JEMSystem into JES/CompMaster.
- After Mercer accused MacLean Associates’ software of infringing Mercer’s copyrights and misappropriating trade secrets, MacLean Associates filed a declaratory judgment action; MacLean asserted an individual copyright infringement claim based on JEMSystem.

## Issues

1. Whether JEMSystem was a “work made for hire,” turning on whether MacLean was Mercer’s employee (rather than an independent contractor) when JEMSystem was created under the federal agency-factor test.
2. Whether MacLean granted Mercer an implied nonexclusive license, and if so, whether the license’s scope permitted Mercer’s incorporation and commercialization of JEMSystem through CompMaster to other clients.
3. Whether laches barred MacLean’s copyright infringement claim due to unreasonable delay and resulting prejudice to Mercer.

## Decision

- The Third Circuit vacated the district court’s directed verdict for Mercer on MacLean’s JEMSystem infringement claim and remanded for further proceedings.
- Work-for-hire: The evidence was mixed under the governing employee/independent-contractor factors; a reasonable jury could find MacLean was an independent contractor when he created JEMSystem, so the issue could not be decided as a matter of law.
- Implied license: Even if MacLean supplied JEMSystem to Mercer in the NYSE relationship, the existence and scope of any implied license—particularly whether it extended beyond NYSE servicing to broad reuse and commercialization—presented factual questions for the jury.
- Laches: Whether MacLean’s delay was unreasonable and whether Mercer suffered prejudice involved disputed facts; laches could not support a directed verdict on this record.

## Legal Principles

- Work-for-hire authorship depends on whether the creator was an employee acting within the scope of employment, evaluated under federal common-law agency factors; when the evidence permits competing inferences, the question is for the factfinder.
- An implied nonexclusive copyright license may arise from conduct, but its scope is limited to the uses reasonably contemplated by the parties; broad reuse or commercialization beyond the original purpose may require factfinding.
- Laches requires both unreasonable delay and prejudice; absent clear, undisputed proof of both elements, laches should not dispose of a copyright claim as a matter of law.

## Conclusion

The Third Circuit set aside the directed verdict because reasonable jurors could disagree on whether JEMSystem was a work made for hire, whether MacLean granted Mercer a license extending to CompMaster’s commercial exploitation, and whether laches applied; the case was remanded for jury determination of these disputed issues.


MacLean Assocs., Inc. v. Wm. M. Mercer-Meidinger-Hansen, Inc., 952 F.2d 769 (3d Cir. 1991)