| News & articles |
Software development-avoiding the bugs
Apr 1, 2010
Email this article
Printer friendly page
As
well as being expensive in terms of time and money, developing
customised
software can be a legal minefield, particular in relation to copyright
and
ownership. How can you make sure you
establish the legal right to what you have paid for?
As far as
ownership is concerned, the general rule under the Copyright Designs and
Patents Act is that the author of the work is the first owner of any copyright
in it, subject to various provisions in the Act.
One important exception to
this rule is the provision relating to employers. Essentially, this provides
that, when an employee develops software in the course of his job, his employer
will own the copyright in that software (unless otherwise agreed).
It follows
therefore that such employees must have appropriately drafted employment
contracts. This will ensure that their employee status is made clear, along
with the nature of their duties in relation to the work, and will help to avoid
disputes about ownership later on.
The legal position
regarding contractors is different. If you instruct a contractor to develop
software then he will be the author of the work and will own the copyright
(subject to any agreement to the contrary). A proper contract must therefore be
in place before work starts.
Ownership of the intellectual property rights,
including the copyright, must be clearly set out. It is surprising how many
businesses commission the development of software without covering ownership
issues in a contract. Now and again the courts have ruled that ownership of
software lies with the party who commissioned it, but generally they are loath
to take that view.
The case
of Griggs Group Limited v Evans is a good example of how things can go
wrong. Griggs, the owners of the famous ‘Doc Martens’ footwear mark,
commissioned a design company to redesign their logo, which in turn employed a
freelance designer Ross Evans to do the work.
Neither Griggs nor the design
company ever mentioned the word copyright. The result was that Griggs found
their company logo was vested in Ross Evans who proceeded to make the Doc
Martens logo available to Griggs’ main competitor in Australia.
Questions of confidentiality and competition also need to be considered.
Regardless of whether the developer is an employee or a contractor, he will
have access to confidential information about your business and the performance
of the software, both of which may be as valuable to a potential competitor as
they are to you.
The
courts have set out tests for confidentiality. Any contract should work around
these principles to ensure that the information obtained during the development
process is confidential and that those doing the work are aware of their
obligations.
It also makes sense to anticipate what might happen when key people in the
development team leave or move on in the future. To avoid competitors
benefiting from their knowledge of the software, it may be advisable to impose
restrictive covenants within the relevant employment or development contracts,
and these need to be drafted with great care if they are to be enforceable.
Before deciding to
develop your own software, it may be worth investigating other options such as
off-the-shelf products or licensing options to use existing software. Certainly,
if you decide to develop your own, then it is wise to get legal advice first to
ensure that ownership and rights in that software are clear and that steps have
been taken to prevent your competitors from benefiting from your original work.
Litigation partner Paul Gordon regularly advises on high-value
disputes involving commercial contracts, copyright and intellectual property.
He is accustomed to dealing with complex High Court litigation as well as
lower-value matters.
paul.gordon@willans.co.uk