Software Development: Who Owns The Copyright

1 August 2008

By Izaz Ali

An age old question but something that keeps on arising- who owns the copyright and other Intellectual Property rights in Software?

A case in point: Meridian International Services Limited v Ian Richardson and Others which dates back to 18 October 2007

It is an established principle that Where a person commissions an independent contractor to create a copyright work, ownership of the copyright will vest in the contractor unless there something set out to the contrary. Here what we are looking for is either an express or implied agreement that deviates from this position. A Courts will only seek to imply a term in a contract where it is necessary to give commercial efficacy to the contract or to give effect to the 'obvious and common intentions' of the parties to the contract.

This case highlights the problem of not being clear as to who owns the copyright and other Intellectual Property rights in the software at the outset. Surely this would represent a fundamental term of the instructions you would give to a developer who you are thinking about engaging to develop software for you?

We always advise clients to put in place an agreement that will deal with ownership and licensing of the Intellectual Property rights in the software so as to avoid any disputes in the future. Also, when entering in to the agreement one can use this as an opportunity to address other key areas of the relationship which include, price, payment terms, warranties as to the work being original and that it will follow the functional specification, development timetable, updates, bug fixes, future compatibility, hosting, restrictions of use, confidentiality etc.

Izaz Ali is a commerical lawyer who specialises in information technology law and intellectual property law with an emphasis on IT, escrow and buying and selling online businesses.