ments in the program and promising to appoint her to head additional projects in China if she and the Chinese programmer met the benchmarks. The agreements also provided, however, that Price Waterhouse would own the intellectual-property rights to the improved software. Id. at 751-52. The Chinese programmer achieved the desired increase in speed, but a dispute arose over Yang’s payment and Yang refused to give Price Waterhouse the source code to the improved software. She then induced the Chinese programmer to assign any copyright in the improved program to Liu, her daughter, and registered the copyright in Liu’s name. Id. at 752.
In the meantime, Price Waterhouse turned to another consultant for assistance in improving its software program. The new consultant successfully increased the speed of the program, and Price Waterhouse incorporated these improvements into its software. Liu then sued Price Waterhouse for copyright infringement. Price Waterhouse counterclaimed for infringement and filed a third-party complaint against Yang for contributory infringement and various state-law claims sounding in misappropriation. For her part, Yang asserted a breach-of-contract claim against Price Waterhouse for nonpayment on the letter agreements. A jury found for Price Waterhouse on the copyright-infringement claims and for Yang on the breach-of-contract claim. Id. at 753.
We affirmed, explaining that because the owner of a copyrighted work has the exclusive right to control the preparation of derivative works, the owner could limit
