Have you engaged a software developer to code software or an app for you? Is the developer producing custom-made software that is critical for your business? Do you think that you own the rights to this software?

Whether you do own the rights depends on the terms of your contract with the developer. If your written contract says nothing about it, or there is no written contract, chances are you do not own it. If you only have a verbal agreement, and you and the developer fall out, proving that they agreed that you will own the software is difficult without independent witnesses.

Why is this a problem? If you are a start-up, you will not be able to sell your most valuable asset if you don’t own it. There may also be questions about your ability to license the software. If the developer owns the copyright in the software and you want to use it for a purpose that is significantly different to that which you discussed with the developer, they may be able to stop you. If the software is only partially developed and your relationship with the developer breaks down, you may not be able to get someone else to take over. The original developer may be able to insist that you start development of the software all over again.

These are many of the problems that we see frequently in the software development space. The answer is simple – get a written copyright assignment (transfer) from the software developer before development commences. It is possible that they may refuse to give this – but, at least you then know where you stand, and can decide whether this developer is suitable for your needs. Trying to obtain an assignment down the track is usually problematic, because the developer often sees that you have a great idea and they want a piece of it. They may require an additional payment or may insist on terms that are not acceptable to you.

As with most legal issues, prevention is so much easier than the cure!