Software is an integral part of our daily life. Many businesses, if not all, revolve around the use of software. A high number of business models are focused upon the licensing of the software to third parties in return for a fee. These businesses will have likely commissioned a third party developer to create and develop the software Â but who owns the intellectual property (IP) within it?
The Copyright Designs and Patents Act 1988 (the 1988 Act) tells us that a literary work is inclusive of a computer program, it goes on to state that copyright will only subsist in works that are recorded in writing or otherwise. Providing that the software is original and has been recorded in some form, copyright will subsist in it.
However, who owns the copyright? The 1988 Act provides that generally speaking, the author of the work is the first owner of the copyright in the software. There is an exception to this general rule in that if the work was created in the course of employment it is the employer who is the first owner of the copyright (unless there is an agreement otherwise). To cover all bases, where a work is computer generated the person who made the necessary arrangements for the creation of the work will be the author of the work and therefore first owner of the copyright.
This means that if I commission a software developer to create a software work, the developer will be the author of the work and accordingly the first owner of the copyright within the software. I will not own the copyright in my software unless the developer is kind enough to assign it over to me.
This means that what I should really be doing when I commission a software work is that I should have my IP hat on. I should insist that it is a term of the commission that the copyright will be assigned to me once the software has been completed. Otherwise, I may be held to ransom by the developer if I want to legally own the copyright in the software that I commissioned.
There are a number of cases that highlight this point. In Clearsprings Management Ltd v Businesslink Ltd and another  EWHC 1487 Clearsprings intended to licence the commissioned software to third parties but did not tell the developer this. When Clearspring asked the court to imply a copyright assignment from the developer so that it could legally licence the software to those third parties, the court declined to do so. This was because it was not in the partiesÂ contemplation when the commission arose, i.e. because Clearspring did not tell the developer. This left Clearspring in the position whereby the court only implied a non-exclusive licence to the software