Cut Your Losses

The Exclusive Rights blog reports on a case from the Supreme Court of Indiana, where one company hired another to design and host its web site. An often-told story; the hiring company stopped paying the bills and the designing company shut down the web site, then sued on the bill. In response, the defendant counterclaimed conversion. Ownership of the web site based on work made for hire and assignment theories was readily disposed of, since the web design company was easily not an employee under CCNV and there was no signed writing for an assignment. The counterclaim thus tumbled, since the defendant didn't actually own the web site that it claimed was converted.

The case is a recommended read for analysis of whether Article 2 of the UCC applies to software (not in this case), and particularly for the concurring opinion on what would have happened had the defendant pleaded a nonexclusive license theory rather than conversion. But it didn't, instead the defendant "elected to pursue only a conversion theory, presumably in hopes of treble damages and attorney fees in this dispute over an amount that surely is dwarfed by the cost of this litigation."

Conwell v. Gray Loon Outdoor Marketing Group, Inc., No. 82S04-0806-CV-00309, 2009 WL 1409477 (Ind. May 19, 2009)

© 2009 Pamela Chestek