## Facts

- Two Iowa State University (ISU) animal science professors, with an ISU associate scientist, developed software supporting ultrasound-based cattle trait prediction and operation of a centralized ultrasound processing lab.
- The software at issue, USOFT, was used with other programs to process ultrasound scans in an ISU lab that operated commercially for a period before ISU decided the operation should move to the private sector.
- ISU’s affiliated research foundation (ISURF), which owned and licensed ISU intellectual property, negotiated a license to Walter & Associates, L.L.C., an agricultural consulting firm led by Marvin J. Walter, to run the ultrasound processing business privately using a software “package” that included USOFT.
- Years later, the professors sent a cease-and-desist letter asserting they (and the associate scientist) owned USOFT and that Walter & Associates’ continued use infringed their copyright; Walter & Associates asserted it had rights through the ISURF license.
- The professors sued for copyright infringement; Walter & Associates and Walter asserted counterclaims and third-party claims including declaratory relief and negligent misrepresentation.
- On cross-motions for partial summary judgment, the court addressed (1) ownership of USOFT under the work-made-for-hire doctrine and (2) whether the researchers owed a duty supporting negligent misrepresentation.

## Issues

1. Whether USOFT was a “work made for hire” created within the scope of the researchers’ ISU employment such that ISU/ISURF owned the copyright rather than the individual researchers.
2. Whether the researchers owed Walter & Associates a duty of care sufficient to support a negligent misrepresentation claim under Iowa law.

## Decision

- The court granted partial summary judgment to Walter & Associates and Walter on copyright ownership, holding USOFT was a work made for hire owned by ISU/ISURF rather than the professors.
- Because the professors did not own the copyright in USOFT, their infringement claim could not proceed on an ownership theory.
- The court granted partial summary judgment to the professors and the associate scientist on Walter & Associates’ negligent misrepresentation claim, holding no duty of care existed on these facts.
- The order resolved these issues at the summary-judgment stage while other claims remained for further proceedings.

## Legal Principles

- A work prepared by an employee within the scope of employment is a “work made for hire,” and the employer is treated as the author for copyright ownership purposes.
- In assessing scope of employment for work-for-hire purposes, courts consider the employee’s job duties, the connection between the work and the employer’s business or research mission, the use of employer resources, and whether any written agreement reallocates ownership.
- Absent a written transfer or other enforceable agreement assigning ownership to individual researchers, institutional intellectual-property structures and licensing practices may support employer ownership of research-developed software.
- Under Iowa negligent misrepresentation doctrine, a duty typically arises only where the defendant is in the business of supplying information for the guidance of others in business transactions; information provided incidentally to other roles does not create that duty.

## Conclusion

The court held that software developed by university researchers in furtherance of their university research and operations was a work made for hire owned by the university’s licensing entity, barring the professors’ infringement claim, and it rejected the licensee’s negligent misrepresentation claim because the researchers were not in a role that created the required duty of care.


Rouse v. Walter & Assocs., L.L.C., 513 F. Supp. 2d 1041 (S.D. Iowa 2007)