(Originally published in .Net Magazine)
For the inexperienced, developing sites and software can be a legal minefield. This article explains how to keep control of your copyright.
Every lawyer’s favourite adage is ‘never assume’. It’s especially relevant for companies hoping to take part in the development of new sites. Each company may ‘assume’ that it will own the copyright of the final product, even though their contract makes no provision for it.
In the creative world of web design, it’s not uncommon for a client to commission a developer to build a web site, only for the relationship to collapse. If there is no contract (or even where there is and the contract isn’t specific), the client often believes that they will own the copyright of the work.
It has always been the case in common law (English case law) that, in the absence of prior agreement between the parties (it’s always best to get these things in writing), copyright remains in the hands of the author of the work, namely the developer or designer. This may come as a shock to many site owners, when they realise they don’t actually own the piece of software, or site design, for which they have often paid a substantial sum of money.
The precise nature of the rights that the client will acquire on purchasing a piece of software or a design will largely depend on the circumstances of the individual case. For instance, if it was made clear by the client that they would want to sell the software to third parties, although there was no express clause outlining this in any agreements, it’s more likely that the client will have not only a licence to use the software for the purposes for which it was commissioned, but also the right to licence it to third parties. In most cases, the law states that the client, in the absence of any specific agreement relating to copyright ownership, will generally have a licence for the software based on the following criteria:
· A non-exclusive, personal, irrevocable and royalty-free licence to use the software
· For the life of the copyright (ie, 70 years from the end of the calendar year in which the author (designer or coder) dies, or where the author is a company, from the end of the year in which the software was published)
· No automatic right to sub-licence the software to third parties
· A right to repair, maintain and upgrade the software in accordance with the requirements of the client’s business
It’s very rare for a court to award copyright ownership to a client (ie, not the creator of the work), in the absence of a prior agreement between the parties. The only time this would arise would be if the client needed, in addition to the right to use the software, the right to exclude the developer from using it and the ability to enforce the copyright against third parties. An example of when this might arise is where the purpose in commissioning the work is for the client to make and sell copies in the marketplace the work was created for, free from competition by the developer or third parties.
As mentioned earlier, the developer can re-use the code they created to build the software for the client, provided that all of the client’s confidential information has been removed. Given that, by implication, the developer retains copyright ownership of the software, they’ll be in a position to assign copyright of the software to the client for a further sum. Alternatively, the developer could license the software to a third party to redevelop it for a new client, provided there are no remnants of the client’s confidential information.
As we have demonstrated, it’s never advisable to enter into a contract for development of some software (which would include a web site) without there being something in writing, particularly in relation to copyright. When planning new projects it’s worth getting these matters set down in writing to ensure that the rights of each party are clear and adequately protected. In the case of the commissioning party, that will mean that there are no surprises when it comes to claiming ownership, or indeed selling the software or web site to third parties
© Brian Miller 2012. This article may not be reproduced without the prior written permission of the author.
This article reflects the current law and practice. It is general in nature, and does not purport in any way to be comprehensive or a substitute for specialist legal advice in individual circumstances.