MacLean Associates v. Mercer-Meidinger-Hansen

Wm. M. Mercer-Meidinger-Hansen, Inc. (Mercer) (defendant) was an employee benefit and compensation consulting firm. In 1980, Barry MacLean (plaintiff) became a high-level employee at Mercer. MacLean was responsible for one of Mercer’s clients, the New York Stock Exchange (NYSE), and sought to design a job evaluation system for NYSE. In mid-1985, Mercer was interested in developing a job-evaluation system that could be used on a personal computer (PC). In September 1985, MacLean formally left Mercer’s employment to start his own consulting business, MacLean Associates, Inc. (plaintiff). However, MacLean continued to work on the NYSE account, and there was no change to NYSE as far as the services it received. MacLean could bind Mercer in its contractual relationship with NYSE. MacLean worked from his personal office and was paid as a consultant to Mercer. In 1986, MacLean authored a computer spreadsheet program called JEMSystem (JEMS), which was a PC-based job-evaluation system. MacLean delivered JEMS to NYSE and, as part of his work on the NYSE account, provided copies of JEMS to two Mercer employees. Thereafter, Mercer incorporated JEMS into a job-evaluation system called CompMaster, and by 1987 Mercer was marketing the copyrighted CompMaster to other clients. Meanwhile, MacLean or MacLean Associates used JEMS to develop a different job-evaluation system, and MacLean obtained a copyright in JEMS. Mercer accused MacLean Associates of infringing Mercer’s copyright in CompMaster. MacLean Associates and MacLean sued Mercer for an adjudication of rights on the copyright issues, and Mercer counterclaimed. Based on evidence presented, a jury was asked to find whether JEMS was a work made for hire by MacLean for Mercer. Prior to any jury finding, the district court directed a verdict for Mercer, ruling that MacLean had been an employee of Mercer when JEMS was created, based primarily on his apparent agency. Alternatively, the court found that MacLean had granted an implied license. MacLean appealed.