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So, you have decided to jump in to the entrepreneurial pool, and have worked on a computer application for the latest and greatest way to build a better mouse-trap, and the software you have developed with the aid of a software development company is starting to get some legs. However, you are not happy with the service and attention you are getting from the developer, so you decide to seek a replacement. Before you fire your current development company there are a few things to consider, not the least of which is “do you own the software?”
This might seem to be a simple question, and one many take for granted. Surely, if I have helped write the code and/or developed the graphics or interface, I own it, right? Surely, the money I paid the developer was for that software. Not so fast. Remember that “development agreement” you signed a few years ago when you hired the developer? Well that “agreement” probably has a provision that specifies who owns the “intellectual property.” So you had better get out that agreement and look through it. Yes, the Copyright Act protects original works of authorship reduced to a tangible medium of expression. And yes, the ownership of a copyrighted work vests initially with the “author.” Copyright Act § 201. But are you or is the developer the “author?” And even if you are an author, are you still the owner? These questions have been the subject of countless lawsuits and the chagrin of many who thought they owned their intellectual property. Therefore, one should familiarize themselves with at least the basics of copyright law, and carefully read “agreements” that they assume involves only the payment for services.
For example, copyright law does not protect “ideas,” only “expression” of those ideas. So you might be the genesis of an idea behind a business. But the actual “product” – i.e., the computer application or software – is actually “created” by someone else. And you may have paid that someone else a lot of money to reduced your idea to copyrightable expression – the software. However, if there is either no agreement, or worse yet, a written agreement (that you signed) saying the developer “owns” all rights to the software, then you may be in a pickle.
The lesson here, is to try and slow down during the fast-paced and exciting early phases of starting a business. Make sure that you are not giving away the store in any agreements you sign. Don’t assume you own what you are paying for. Make sure any third-party agreements include a provision that you are the owner of the IP (or if there are no written agreements, that you make sure you have one).