You paid your software developers…but what did you buy?

Many business owners don’t always realise that when they have custom software written for them, they don’t automatically own the right to it.

Software ownership can be tricky to understand if you’re a non-technical person. To try and illustrate, we’ll use music as an example. Generally speaking, we all understand that if you wanted to listen to a song from one of your favourite artists whenever you’d like, you need to pay to do so; whether that’s through a streaming service, or buying it via a medium such as CD or digital download. We also generally accept that what we’re not getting is the sheet music to that song. We can’t, therefore, play it ourselves or change how the chorus goes if we don’t like that little twiddly bit they do in the middle. We also can’t sell the song itself to anyone else. We’re only allowed to use the recording (or copy) of it.

The situation for software is similar. If you imagine that the application that you use as an end-user is the music you stream or download. The sheet music that describes how to play the song is the software’s source code used to create the application. The software developers write the sheet music for your application.

In reality, there is more nuance to it, but in simple terms under copyright law, a computer program (the source code) is considered a literary work. This means that by default the original owner of the copyright is the author of the works. This means that the freelancer or company who you contracted the work to automatically owns the copyright to the source code.

This is why it is critical for you, the business owner, to ensure there is an explicit contract in place which specifies who owns what. Generally, since the business will receive the benefits of the application, and is paying for its development, it should want to hold the copyright to the source code to ensure it can continue to make changes as necessary.

What you can’t buy

As I alluded to above, complexity occurs because in almost every software project is a lot of source code that wasn’t written by your developers. They use libraries of code written by many other third parties. Each of those libraries can have their own licensing rules that must be followed. Additionally, your developers are also likely to have used other source code they have written and included in other applications for other clients of theirs. This makes sense when dealing with common application functions such as user logins. By using code that has already been written and tested elsewhere, it saves you significant costs and reduces the time-to-market. However, this means you can’t have exclusive ownership of those; otherwise, you could reasonably demand the developers’ other clients owe you licencing fees for using your work without permission. You wouldn’t want the reverse to happen to you, so contracts should have clauses which cover this Background IP. The developers grant you a licence to be able to use their code to support your applications needs, but you don’t have exclusive rights to it.

Take action

Do you have a signed agreement with your developers which clearly states that you are the owner of the work product^[1] produced? If not, I strongly recommend you speak to your developers as a matter of urgency; otherwise, you could end up in costly litigation with them later. That’s time and money you don’t want to have to waste.

This article only scratched the surface of the matter, it can be more complex, and you should seek legal advice, but I would be happy to have a free, impartial 15-minute discussion with you to advise you on your initial steps. Book your free consultation here.

[1] This is the source code but also should cover other documentation and artefacts produced as part of the development cycle