As if to confirm the Patent Office's suspicions - that businesses aren't careful enough about the ownership of IP in their dealings with one another - the High Court ruled recently that a company that commissioned software from a software developer neither owned nor held an exclusive licence to the resulting software.
Clearsprings Management Limited commissioned Business Link Limited to produce a web-based database system, but the parties had no written agreement setting out who would own the copyright in the software. Both parties accepted that Business Link owned the copyright on creation (as author of the software); Clearsprings claimed that it had either been subsequently assigned to them, or that Business Link had granted to Clearsprings an exclusive licence (with a right to sublicence).
The judge decided that it was not necessary to imply an assignment or an exclusive licence or even a licence with a right to sublicence:
"In my judgment it is not necessary to imply into the contract a term giving [Clearspring] ... exclusivity in relation to the copyright .... the only terms which are necessary to give the contract business efficacy are, firstly, a licence for [Clearspring] ... to use the software for the purposes of their business and, secondly, a restriction on [Business Link] ... making use of the information about [Clearspring's] ... operating procedures for purposes other than those of [Clearspring]."
So without an express contract, and despite the fact that Business Link designed the software to fit Clearspring's needs and was paid to do so, Clearspring had only limited rights in the software. IPKat says:
"this decision is the most detailed yet on which terms may or not be implied into a software commission contract. [IPKat] ... congratulates the court on taking the business efficacy rule so far."
This case should act as a further warning: if you are paying someone to design software for you, make sure you know (and can demonstrate to a court) what rights you will have in the software.
Comments