Who owns your software?

One problem we encounter time and time again is the issue of software ownership. There are still a number of development companies retaining intellectual property rights for bespoke software they have been commissioned to build. As opposed to transferring property rights, the development company instead provides the client with some form of global licence.

Customers often assume the main issue in this situation is that the development company will resell or reuse the software for commercial gain. This is not the problem. Indeed, even where property rights have been transferred, simply making minor changes to a product makes legally asserting property rights very difficult. The major issue is maintainability, specifically, having access to the product’s source code and data. Without access to the source, all changes must go via the development company. In such circumstances, development companies obtain unfair commercial leverage and circumvent market forces that would usually promote competition and regulate quality and pricing.

Audacia have worked on a number of intellectual property negotiations, usually arising from a decision by the company to change supplier. In many cases a legal approach is not suitable. Even where a legal claim of ownership exists, it doesn’t always guarantee a happy ending. We have encountered a number of “database failures resulting in the loss of data” issues after legal notices have been delivered to development companies.

In summary, always check the terms and conditions before signing any contracts. These negotiations are usually less fraught at the beginning of commercial relationships as opposed to the end.