Ben Waldeck is a commercial and technology lawyer who provides legal advice on copyright in software through Coast to Coast Legal. Ben’s background in software, technology, and startups means that he is well placed to provide accurate and timely legal advice on matters relating to software. Ben, with the team at Coast to Coast Legal also has experience in handling disputes and litigation for software companies.

Common Copyright Issues

Below are common legal issues that companies face relating to software. Ben’s legal services help prevent such scenarios and also assist companies who are facing these common issues.

Failing to Assign Software Code from Contractors

Ownership of source code is often the subject of disputes, particularly where contractors have written the code.  Directors and managers often believe they gain automatic ownership of source code after paying third-party software developers to write it. This is incorrect as the Copyright Act requires assignments of copyrighted material to be in writing.  Further, to get the Court to imply such rights can be an expensive uphill battle.

Although technically not part of the source code – logos, photos and images that form part of the software are also protected under copyright.  It is important that software owners ensure they own all of the photos on the website and illustrations and icons that form part of the user interface or the company’s website.

When the Founders Aren’t Employees

As discussed, in the absence of an agreement, authors of software code who are not employees of the company in most circumstances will personally own the software.

Founders of tech and startups usually bootstrap their idea into existence and ‘run lean’.  Sometimes, with limited initial cashflow, the founders don’t become employees of the company until the company starts generating income.  In these circumstances, and in the absence of a contract, the source code that is created up until the point of its author becoming an employee is likely to subsist in that author personally.  Therefore, a deed of assignment is required to assign rights in the software that was created ‘pre-employment’ to the company.

Further, in circumstances where founders develop code prior to their company’s incorporation, that code will also vest in the author(s) personally.

Being Held to Ransom

Of course, if copyright in the source code is not assigned by a contractor, or other third-party (discussed above) it can be a massive problem if the coder does not agree to execute a deed of assignment at a later stage.  In fact, there have been many circumstances where authors of graphics, code and other literary works demand further payment to execute the deed.

Usually, when a designer, author or software programmer is provided with a deed of assignment to sign, they will get legal advice.  Obviously, their lawyer will advise them of their rights – including that they don’t have to sign it. Additionally, the lawyer will also help them to realise the commercial value of their newly discovered asset.  This doesn’t happen all of the time, but it certainly does happen – especially if there is a dispute.

Employees Stealing Software

Other complications regularly occur where an employee effectively takes the source code that he or she wrote at work and starts a rival software company.   Whole employees’ intellectual property that is produced at work usually vests in the employer, there are some exceptions.  For example, if the copyrighted works that were produced were not in the employees’ job description, it can be argued the works do not vest in the employer – and therefore it was not stolen.

In such cases, access to the source code and database can be acquired from the infringing party to prove that those works have been copied, stolen, or otherwise adapted from the source code.

It is therefore critical to have well-drafted employment agreements that accurately define employees’ roles and what work they are permitted to perform while at work.  Also, contractor agreements need to assign source code and other IP to the company.

Frequently Asked Questions

How Do I Copyright Software?

The good news is that it is extremely easy to gain copyright protection. In fact, you don’t have to do anything because copyright vests into the author upon creation of the source code. This is known as an automatic right. There is no method of registration of copyright.

What Are Employers' Rights To Copyright Created at Work?

In Australia, copyrighted works created by an employee in the course of employment vests in the employer. “In the course of employment” means during employment, while carrying out their job description.

Which Court are Software Disputes Heard In?

The Copyright Act is Federal legislation. Therefore, the appropriate jurisdiction for copyright disputes in software is in the Federal Court. Likewise, other intellectual property such as trade marks, designs and patents are also heard in the Federal Court.