Gannons' opinion and analysis

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Copyright ownership

Copyright ownership does not implicitly belong to the software development company. Instead it belongs to the commissioning company.

Having copyright ownership enables the owner to exploit the copyright and control the use of that copyright. The copyright owner can bring actions for infringement and licence the copyright, so as to exploit it and also dictate the terms of the licence and in turn how the licence will be used. However, in collaborative software development affairs there will be no implicit term that the copyright belongs to the software development company. Instead it belongs to the company that commissioned the software development.

Destra Software v Comada (UK) LLP & Ors [2013] EWHC 1575 (Pat)

Mr Hughes carried out his software development consultancy via Destra. Mr Hughes argued that he was the copyright owner of code developed with the defendants. Mr Hughes worked as part of a team amongst which were the defendants. They created a product and Mr Hughes claimed that the defendants only had a licence to use the product and the defendants were acting beyond the scope of the narrow licence.

The High Court decided that there was an express term in the consultancy agreement that prevented such a claim. The High Court went on to consider the issue of copyright ownership in the event they were wrong about the binding nature of the agreement.

The High Court still found in favour of the defendants.

It found that it did not make commercial sense to withhold copyright ownership from the defendants considering the point of the agreement i.e to develop the software. It did not make commercial sense because copyright not a part of the defendants business it was their business.

Secondly, the Court found that a bystander to the agreement would not have concluded that anyone should be able claim a ‘veto’ over the defendants’ use of the product.

The defendants needed to be able to licence and enforce infringement and to do that it must have been given an assignment of the copyright.

In the collaborative scheme of things it made no sense for one person to own the copyright. Finally, there could not be an implied term that the copyright belonged to Mr Hughes when he and he alone knew of its other uses.

The Take Away

The case considered what would be the outcome if the consultancy agreement was not effective. In the case itself the consultancy agreement had not been signed by Mr Hughes. The Court found that on the basis of Mr Hughes conducted, for example invoicing, he was bound by the agreement.

The case shows the need to understand the explicit clauses regarding copyright ownership. Relying on implication is not safe ground.

The Courts, with respect to copyright ownership in software, will look to the commerciality of the arrangements in order to determine the ownership rights.  Here, the successful defendant business depended on the software ownership.

Whenever software is to be developed in a collaborative setting it is important that everyone ensures their rights are determined before hand.

Being a copyright owner or not can have huge implications for what you may wish to do with the software. Considering the financial cost in its development ownership is an important factor to bolt down.

Gannons view is that the decision in favour of the defendants is a good one. The team input denoted an ideal that no one person should be able to determine how the copyright should be used and in considering that everyone knew that the nature of the defendants’ business depended on the software and only the consultant knew about his needs and that fact did not operate on the minds of the others that the claimant in this case could not be said to be the owner.

Implied terms only arise from what is obvious and it was the former and not the latter which was obvious.

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