Copyright without tears

Dai Davis leads the software copyright masterclass

Dai Davis leads the software copyright masterclass

When a company employs an external contractor to develop software for it, the copyright owner is the contractor unless you agree otherwise at the start of a contract.

So what can you do if you don't own the copyright, and the contractor starts licensing other companies to use the software, perhaps at a fraction of the development price you paid? First of all, the contractor is within their rights. The issue you have to deal with is whether to persuade the contractor to give up those rights. My experience is that contractors can always be persuaded - for a price.

Certainly, the earlier you raise the issue, the easier and cheaper it will be to own the software. But is it sensible for your company to own the software? Often, it is cheaper to focus not on the ownership of the software but on its exploitation. You could, for example, get the contractor to agree to a lock-out period during which no third parties can be licensed, or agree a royalty payment to you for each licence granted. Most contractors will be amenable to these suggestions.

Now for the other big problem: a contractor charging you extra for using the software in different circumstances - on a bigger computer, say. You can protect yourself here by ensuring the original licence sets out such charges. You could also reserve the right to transfer the licence to an outsourcer, free of charge. Again, the earlier, you ask for licence extensions, the easier it will be to get them.

Dai Davies is a solicitor and consultant at law firm Nabarro Nathanson

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