Do I actually own the Copyright?

24 Nov Do I actually own the Copyright?

Technology plays an integral part in our daily lives; it is safe to say that many of us couldn’t function without our smart phones and computers. But without the software that operates that high-tech hardware, the ubiquitous smart phone would be nothing more than a glorified paperweight.

The importance of software cannot be understated. Significant investments are made in the development of software to manage customer data, to produce sophisticated engineering drawings and to order your weekly Japanese take away.

It would be counterproductive if this significant investment could simply be copied by third parties as it would dissuade investments in the development of software. This is where copyright and the protections afforded under the Copyright Act 1968 (Cth) (Copyright Act) come into play.

It is often not appreciated that the process of coding software necessarily involves the compilation of words, figures or symbols to create a series of instructions that execute a user’s commands and direct the corresponding action from a device, such as a computer. The code that underpins software is not dissimilar to a book and software is defined as a “literary work” under the Copyright Act.

The owner of the copyright in the software has the exclusive right to, amongst other things, to reproduce the software in a material form.[1] The act of installing software onto the hard drive of a device is a reproduction of the software in material form. Further, on each occasion that software is used on that device there is a further material reproduction in material form of that software from the hard drive of that device to the RAM of that device.[2]

However, the protection under the Copyright Act is only afforded to owner of the copyright. The general position under the Copyright Act is that the author of the literary work is owner of the copyright subsisting in that work, that is to say, the person(s) responsible for writing the software is the owner of the copyright in the software.[3] Unless the software was written by an employee under a contract of service, where the owner of the copyright in the software would be the employer.[4]

This is a common pitfall for parties who have not written the software personally. Unless you are a proficient coder, you would inevitably outsource or retain third parties to “write” the software. In such instances, unless they are an employee or there is a written agreement to the contrary, that third party would be the owner of the copyright in the software written by them, even if you have paid to write the software and the software embodies your ideas.

Further, it is often overlooked that an assignment of copyright is only effective if it is in writing and signed by or on behalf of the assignor.[5] That is to say, even if it is agreed between you and third party that you are to be the owner of the copyright, there is no effective assignment of ownership unless there is a written agreement to that effect.

This could mean that despite paying for the development of a software program, you may not in fact be the owner of the copyright in the software and entitled to the rights and protections under the Copyright Act.

The ownership of copyright is often the last thing that a tech startup turns their mind to and the failure to address this fundamental issue from the outset may have wide ranging and serious ramifications once a product is ready to go to market.

Grant Hansen (ghansen@harrisco.com.au) and Alvin Ng (ang@harrisco.com.au) are intellectual property experts who specialise in intellectual property matters for startups, small businesses and big businesses and can assist you in ensuring that you have the proper processes and documentation from the outset.

This article is intended to provide general information on the identified legal topics and does not constitute legal advice and should not be relied upon as such.    

[1] Section 31 of the Copyright Act.

[2] Section 10 of the Copyright Act, definition of “material form”.

[3] Section 35(2) of the Copyright Act.

[4] Section 35(6) of the Copyright Act.

[5] Section 196(3) of the Copyright Act.