A technology start-up company can be an informal environment – both Apple Computer and Hewlett-Packard famously started out in garages, and Yahoo!, Google and Facebook were developed, initially at least, in college dorm rooms. But informality can, and frequently does, lead to legal disputes down the road. In JustMed, Inc. v. Byce, 2010 U.S. App. LEXIS 6976 (9th Cir. Apr. 5, 2010), the Ninth Circuit was faced with a dispute over ownership of the source code for a program that operated a digital audio device.

Michael Byce, the programmer who wrote most of the code in question, claimed to be an independent contractor and thus the author, and copyright owner, of the code. JustMed claimed that Byce was an employee and that the code was a work for hire, with copyright ownership vested in the company. The appeals court concluded that the well-established factors for making the intensely fact-sensitive determination of employee status should be weighed specially in light of the fact that the company involved was a technology start-up and the activity in question was computer programming.