Software and technology contracts

Software and technology is a fast moving area and this includes the legal aspects and issues associated. If you need experienced, practical and cost effective solicitors to draft, review or update software contracts, please do get in contact.

The basic software contracts you might need

To be able to establish copyright ownership of software is a strong starting point but other legal protections are often essential. These commonly include :

• trade secret agreements.
• software collaboration agreements.
• software development contracts.
• software licensing agreements.
• employment contracts which include sufficient protections.

The asset in technology is the software. Software is protected by the law of copyright.

Copyright law will only protect the ideas expressed by coding.  Copyright laws do not protect the ideas themselves.  Ideas can only usually be protected by trade secret and or confidentiality agreements.

It is not possible to register your ownership of copyright in your software in the UK on a public register. Public registers for copyright tend not to be operated elsewhere in the world.

The lack of public registers means that creation and ownership of the copyright in software has to be written down. Creators should mark their software with a copyright notice. This is the copyright symbol © followed by their name and the year.

Best practice is to keep the draft documents you used during the development of your software to reach the final product. This documentation helps the creator should a dispute arise to claim copyright by virtue of creation.

Software development methods

There are generally two types of methods for developing software. Copyright law will extend to protect the ideas created under either method:-

• Waterfall method – the software development process will begin with a detailed specification, and develop through design, coding and testing.
• Agile method – detailed demand for the end product is typically not specified at the outset, but overall project scope and goals are agreed between parties.

Who owns the IP with software development?

There will be an assumption that software is owned by a contractor unless you can prove otherwise. Good evidence is a written contract detailing your ownership bearing in mind any verbal variations.  In our experience it is when there is a sale of copyright that the issue becomes acute. An inability to establish ownership does impact on the value of the asset.

Often sales are held up whilst negotiations take place.  The fall out is usually cash settlements are paid to the creators for them to assign the copyright and other intellectual property over.  A buyer will not proceed without such an assignment.

Software and technology contract problem areas

There is a growing demand to customise software to fit specific business requirements. Often this will involve the customisation and merger of an existing software package or adding functionality and varying the existing base technology.

With software development projects, it is highly advisable for clarity and protection to ensure you have a suitable software development contract.

Major problems, additional costs, delays or disputes arise when the agreed services, ownership of IP, deliverables and timing are not clearly set out in a software development agreement.

Key areas in software and technology contracts

The areas to keep a watch on when negotiating software or technology contracts include:-

• Detail about services.
• Timetable for the project.
• Ownership of the intellectual property rights;
• Acceptance testing.
• Payment terms; and
• Method for changes to the specification and services.

Restrictions

You will need to impose some restrictions to protect your assets and the revenue stream. Depending upon the project, typical restrictions to consider include:

• Stopping reverse engineering;
• Using your software by incorporation into other programmes – what is your share of the revenue;
• Prohibiting copies of the developed software; and
• Rules on access to source code and object code.

We often work with smaller SMEs negotiating with large corporates as well as the other way around. Please do get in contact for assistance with any aspect of software development law or advice on any technology contract or legal issue associated with tech.