Software and technology contracts

Software and technology law is constantly evolving. We provide practical, cost-effective legal support to draft, review and update software contracts to meet your business needs.

The basic software contracts you might need

Establishing copyright ownership is a useful 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 with appropriate IP protections.

Key areas in software and technology contracts

Key areas to consider when negotiating software or technology contracts include:

• Scope of services.
• Project timetable.
• Ownership of intellectual property rights.
• Acceptance testing.
• Payment terms.
• Procedures for changing specifications or services.

Software and technology contract problem areas

Software is increasingly customised to meet specific business requirements, whether by modifying existing packages or adding new functionality.

A suitable software development contract helps clarify the agreed services, IP ownership, deliverables and timescales. Unclear terms can lead to additional costs, delays and disputes.

Restrictions

Contracts may need restrictions to protect software, assets and revenue streams. Depending on the project, these may cover:

• Reverse engineering.
• Incorporating software into other programmes and sharing resulting revenue.
• Copying developed software.
• Access to source code and object code.

Who owns the IP with software development?

Ownership of software developed by a contractor depends on the applicable law and contractual arrangements. A written agreement clearly setting out ownership and any subsequent variations is important.

Ownership issues often become critical during a business sale. If the seller cannot establish ownership of its software, the transaction may be delayed while the parties negotiate an assignment of copyright and other intellectual property rights. Buyers will generally want clear evidence that the necessary rights are held or can be transferred.

Software development methods

Software is commonly developed using one of two methods, each requiring appropriate contractual protections:

• Waterfall method – Development follows a defined process, typically moving from specification and design to coding and testing.
• Agile method – The detailed requirements may evolve during development, while the parties agree the overall project scope and objectives.

Copyright in software and technology development

Software is protected by copyright. Copyright protects the expression of ideas in code, rather than the underlying ideas themselves. Ideas may sometimes be protected through confidentiality obligations and trade secret protections.

There is no public register of copyright ownership for software in the UK. It is therefore important to document creation and ownership clearly. Copyright notices, identifying the owner and year, can also help establish ownership.

Keeping development drafts and supporting documentation may provide useful evidence if ownership is disputed.

We assist SMEs and larger businesses with software development agreements, IP ownership and technology contracts. Contact us for practical legal support with software development or other technology-related issues.