INNOVATION

The Benefits of Owning Your Software’s Intellectual Property

If you would like to skip the me­an­der­ing plot of le­gal de­f­i­n­i­tions be­low, but at the same time miss the char­ac­ter de­vel­op­ment, story arch and ben­e­fits of the plot twist of this thrilling ar­ti­cle, the sim­ple, all-en­com­pass­ing end­ing for all of our clients is this:

…Once the Application has been re­leased into a Production Environment, WM as­signs to Customer Intellectual Property Rights in the Application.”

If that’s ticked your box and you have a wider un­der­stand­ing of copy­right law and the ben­e­fits that own­ing the in­tel­lec­tual prop­erty rights pro­vides, you are prob­a­bly sat­is­fied with the end­ing. If you would like to un­der­stand the why be­hind this, please read on.

Definition of Software IP

Great, you’ve read on. This means one of two things. 1. You ac­tu­ally want to un­der­stand the topic or 2. You were in­trigued by my ref­er­ence to a plot. I shall try to sat­isfy both with a po­lar­is­ing anal­ogy on the topic of law!

What is Intellectual Property?

Before we can be­gin, it’s im­por­tant to agree upon 2 de­f­i­n­i­tions (well 3 re­ally). The first is, what is Intellectual Property? For this we’ll fol­low the de­f­i­n­i­tion pro­vided by the World Intellectual Property Organisation:

Intellectual prop­erty (IP) refers to cre­ations of the mind, such as in­ven­tions; lit­er­ary and artis­tic works, de­signs, and sym­bols, names and im­ages used in com­merce…IP is pro­tected in law by, for ex­am­ple, patents, copy­right and trade­marks, which en­able peo­ple to earn recog­ni­tion or fi­nan­cial ben­e­fit from what they in­vent or cre­ate. By strik­ing the right bal­ance be­tween the in­ter­ests of in­no­va­tors and the wider pub­lic in­ter­est, the IP sys­tem aims to fos­ter an en­vi­ron­ment in which cre­ativ­ity and in­no­va­tion can flour­ish.

Great, so now we know in­tel­lec­tual prop­erty cov­ers off every­thing from trade­marks to copy­right, what’s the im­por­tant and spe­cific mech­a­nism around own­er­ship of a soft­ware ap­pli­ca­tions code­base? The im­por­tant thing to note here is that copy­right law and re­lated rights come into play. Let’s look at a de­f­i­n­i­tion of copy­right to cover this off.

Copyright (or au­thor’s right) is a le­gal term used to de­scribe the rights that cre­ators have over their lit­er­ary and artis­tic works. Works cov­ered by copy­right range from books, mu­sic, paint­ings, sculp­ture, and films, to com­puter pro­grams, data­bases, ad­ver­tise­ments, maps, and tech­ni­cal draw­ings.

What this means is that un­less oth­er­wise specif­i­cally stated the copy­right is owned by the au­thor of the ap­pli­ca­tions code­base. This means that even if you’re en­gag­ing a com­pany, team mem­ber or con­trac­tors’ ser­vices, they still own the copy­right. This is ex­plained well by Dundas Lawyers in ref­er­ence to the prece­dent of Redrock Holdings Pty Ltd v Hinkley (2001) VSC91.

Hopefully, this is only un­til they sign it over to you through a bind­ing con­tract. For an in­ter­nal team that you’ve hired, this is within an em­ployee con­tract. For a con­trac­tor or com­pany, you will need to en­sure that they are as­sign­ing the IP to you through a ser­vices agree­ment. Be sure to check that the com­pany has the right clauses in place in their em­ploy­ment con­tracts as well as within their ser­vices agree­ment.

Okay, the de­f­i­n­i­tions sec­tion has set the scene. But we need a story to help il­lus­trate the im­por­tance of soft­ware IP. Let’s spice the ar­ti­cle up by bring­ing in drug car­tels. What does in­tel­lec­tual prop­erty law have to do with car­tels? Wait for it…

Our Approach

As you can see above it’s im­por­tant for both the copy­right and in­tel­lec­tual prop­erty to be as­signed if you wish to take full own­er­ship of the ap­pli­ca­tion. At WorkingMouse we achieve this through two mech­a­nisms. The first is our em­ploy­ment con­tract and the sec­ond is our ser­vices agree­ment.

All em­ploy­ees at WorkingMouse are em­ployed un­der Australian law in a full or part time ba­sis. This mean that all work pro­duced falls un­der the 1968 Australian Copyright act. Every em­ployee has a signed em­ploy­ment con­tract that stip­u­lates the fol­low­ing:

INTELLECTUAL PROPERTY AND MORAL RIGHTS

You agree that all Intellectual Property:

  • made or de­vel­oped by you in the course of your em­ploy­ment with WorkingMouse;
  • to which you con­tribute or have con­tributed to in the course of your em­ploy­ment with WorkingMouse;

whether:

  • made or de­vel­oped within or out­side WorkingMouse’s usual work­ing hours;
  • made or de­vel­oped at WorkingMouse’s premises, or at any other place; or
  • whether made or de­vel­oped with or with­out WorkingMouse’s equip­ment and as­sets, vests im­me­di­ately upon its cre­ation in WorkingMouse.

You must dis­close all such Intellectual Property to WorkingMouse im­me­di­ately upon its be­ing made or de­vel­oped.

Further, dur­ing or af­ter your em­ploy­ment, you will, at the re­quest of WorkingMouse:

  • as­sign or trans­fer any rights to any such Intellectual Property to WorkingMouse or any other per­son that WorkingMouse may nom­i­nate;
  • at WorkingMouse ex­pense take any or all steps nec­es­sary to pro­tect or al­low the Employer to pro­tect or ex­ploit any such Intellectual Property.

You also con­sent to WorkingMouse do­ing acts or omis­sions which would oth­er­wise in­fringe moral rights (as the term in de­fined in the Copyright Act 1968 (Cth)), which you may have in any such Intellectual Property.

This means that IP cre­ated by a de­vel­op­ment team is as­signed to WorkingMouse Pty Ltd. This gives us the right to trans­fer that IP for our cus­tomers to own. This is achieved in our Services agree­ment un­der the fol­low­ing points:

7. Title and use

7.1. Ownership of Application

(d) Subject to clause 5 (b), once the Application has been re­leased into a Production Environment, WM as­signs to Customer Intellectual Property Rights in the Application.

(e) Upon re­quest WM will pro­vide the source code for the Application to Customer.

Definition within our Services agree­ment:

Intellectual Property Rights means all and any patents, patent ap­pli­ca­tions, trade­marks, ser­vice marks, trade names, reg­is­tered de­signs, un­reg­is­tered de­sign rights, copy­rights, know how, trade se­crets, do­main names, in­ter­net ad­dresses, rights in Confidential Information, and any other in­tel­lec­tual prop­erty rights, whether reg­is­tered or un­reg­is­tered, and in­clud­ing all ap­pli­ca­tions and rights to ap­ply for any of the same now or in the fu­ture.

You can down­load our ser­vices agree­ment at the time of writ­ing here for your­self to read.

The trade for WorkingMouse is not in re­gard to the in­tel­lec­tual prop­erty of our clients ap­pli­ca­tions but the ex­change of rev­enue for ser­vices ren­dered in our ex­pe­ri­ence, process and knowl­edge to de­liver the tar­get Application.

Thinking back to our car­tel anal­ogy, I see this as the skills re­quired to cre­ate in cre­at­ing the Magic for­mu­la’. Did Pablo Escobar per­son­ally know how his prod­uct was pro­duced? We can as­sume not. This is left to sci­en­tists and a jun­gle work­force.

What copy­right gives you

Great, so in cre­at­ing your prod­uct or so­lu­tion, you’ve care­fully crossed your T’s and dot­ted your I’s to en­sure you have con­trol of the in­tel­lec­tual prop­erty and copy­right. So what? What does this mean aside from know­ing that a con­tract or de­vel­oper is­n’t go­ing to copy and re­de­ploy your so­lu­tion un­der their own name or hold you hostage in a charge to trans­fer the IP to you?

Well, aside from be­ing able to de­fend your po­si­tion un­der Australian law (no small thing) copy­right also gives you eco­nomic rights to the IP. As de­fined by IP Australia this pro­vides the fol­low­ing rights.

The owner of copy­right in soft­ware has the ex­clu­sive right to:

  • make copies of the soft­ware
  • pub­lish the soft­ware
  • com­mu­ni­cate the soft­ware to the pub­lic
  • make adap­ta­tions of the soft­ware
  • en­ter into a com­mer­cial rental arrange­ment with re­spect to the soft­ware
  • li­cense oth­ers to do any of the above.

Thinking back to our car­tel anal­ogy this is ef­fec­tively the own­er­ship and dis­tri­b­u­tion rights of the car­tel. Would Mr Escobar al­low some­one cre­at­ing his magic pow­der to hold the dis­tri­b­u­tion rights? I think not!

Although it may not be an im­me­di­ate pri­or­ity for the soft­ware, you may want to li­cense the soft­ware to cre­ate a rev­enue stream or even sell it to a third party. This would­n’t be pos­si­ble with­out own­ing the IP of the soft­ware.

Copyright law is very im­por­tant in pro­tect­ing the rights of cre­atives and freely de­vel­oped IP, how­ever it’s im­por­tant to un­der­stand its com­mer­cial im­pli­ca­tion. I hope our loose anal­ogy has en­abled this topic to be some­what lighter. Tune in next week for an­other car­tel in­sight, mak­ing your prod­uct sticky! I am kid­ding but check out our Learning cen­tre to see the other el­e­ments in build­ing soft­ware and how they can im­pact your suc­cess.

ABOUT THE AUTHOR

David Burkett

Growth en­thu­si­ast and res­i­dent pom

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