If you are a software developer, you are probably worried about protecting your intellectual property (IP) rights when developing software for your clients. You may often find yourself retaining and recycling slabs of code for your clients. This code may have IP rights attached to it that you should be aware of in order to make the most out of its commercial value.
When approaching this problem, consider your needs when drafting appropriate limitations on assignable IP under the development agreement. Once you have clearly defined and divided your IP rights within the development agreement, you will be able to proceed with peace of mind knowing that your intellectual property rights are protected.
Types of IP Rights in Software Development
Patent law can protect software in some circumstances. Patents offer the strongest protection, for software so you should consider whether your software is patentable. If it is, this is just one of the ways you can protect your IP. In addition, physical devices or hardware can sometimes be patented.
Another way you can protect your software is copyright law. Software is recognised as a literary work. Unlike patents or trade marks, you do not need to register copyright in Australia. This is not the same in other countries like the US, however, so if you intend on expanding overseas you should look at registering your copyright in each applicable country.
For registered IP like patents, defining and dividing your rights can be simplified. Copyright, on the other hand, is harder to define and consequently harder to protect. You should try to be vigilant and as clear as possible when drafting your Development Agreement so that none of your IP rights slip through unprotected.
IP Ownership in Development Agreements
If you are developing software that a client will use, generally you will own the IP attached to your software. Your client will own any and all IP generated as a result of your software.
You can also transfer or licence out IP ownership, similar to physical property. You can:
- assign IP in full or partially to another business or individual; and
- licence IP under specific terms and conditions of use.
As a software developer, clearly defining whether the IP protection in the work is assigned or licenced to the client will help you avoid disputes over ownership later on.
Continue reading this article below the formComplications
Not all IP ownership is this straightforward. Sometimes the components used to create software are more complex and the line between ownership can be blurred. If the code you use to create the software is complex, you should insert a clause in your development agreement that stipulates when the client can use this code.
What is the Difference Between ‘New IP’ and ‘Developer IP’?
New IP refers to any code that specifically relates to your client’s business emerging from the development of the software. Developer IP instead refers to background IP or the code that you have recycled and reused through the development of new software for your clients.
Your client owns all they need to in terms of the development agreement and in terms of protecting their own interests. Similarly, you are able to continue using the code that you have developed with your new client without infringing on the IP rights of your previous clients.
Key Takeaways
It is always better to know your IP rights before you enter an agreement with anyone else intending to use your product or services. The clearer these rights are, the more effective and painless your development agreement will be. IP rights can come in different forms. Some are registerable and some not. It is important to know:
- exactly what IP right you are trying to protect; and
- that the development agreement defines them sufficiently.
You should make sure that there is a clear separation between your IP rights and your clients’ in any development agreement. If you have any questions about software IP rights, contact LegalVision’s IT lawyers on 1300 544 755 or fill out the form on this page.
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