Avtec Systems, Inc. v. Peiffer

Jeffrey Peiffer (defendant) worked for Avtec Systems, Inc. (Avtec) (plaintiff), a space-related technology company, from 1984 to 1992. In 1985 Peiffer created a computer-software program that performed orbital simulations for satellites. Peiffer created the program at home, on his own computer, and without direction from Avtec. However, in 1988 Peiffer showed Avtec’s president the original version of the program, known as the .309 version. Between 1988 and 1992, Peiffer also demonstrated the program to potential Avtec clients. At one point, an Avtec employee identified errors in the program, which Peiffer corrected. Peiffer’s supervisor told Peiffer that Avtec was not interested in the program. Peiffer then met with Paul Kisak (defendant) and granted an exclusive license to market the corrected version of the program, known as the .205 version, to Kisak’s company, Kisak-Kisak, Inc. (KKI) (defendant). In 1992 Avtec filed for copyright ownership of the .309 version and brought suit against Peiffer, Kisak, and KKI in federal district court. Avtec alleged copyright infringement, trade-secret misappropriation, and the breach of a fiduciary duty. The court found that the .309 version was not created by Peiffer in the scope of his employment and therefore was not a work for hire to which Avtec had a valid claim of ownership. Avtec appealed. The United States Court of Appeals for the Fourth Circuit granted certiorari.