Appeal court ruling 'common sense'

It's common sense that software developers continue to have access to the software sub-routines and libraries they repeatedly use to develop commissioned applications, says one senior IP lawyer.

It's common sense that software developers continue to have access to the software sub-routines and libraries they repeatedly use to develop commissioned applications, says one senior IP lawyer.

In the case of Perry Group v Pacific Software, Justice Williams' August 2002 High Court ruling found that "having paid for it, [Perry Group] are the sole owner of the whole of the software and all the intellectual property incorporated in it". The case turned on who owned copyright of the source code -- including libraries and subroutines -- for a VB/Access gaming machine database Perry had commissioned from Pacific.

The Court of Appeal, however, this month noted that Justice Williams, in ruling on the application to stay the execution of his judgement, said concerns that delivering source code which might ultimately belong to Pacific were based on a misreading of the judgement. Perry had commissioned source and library code "to the extent only that such required to make the database usable in accordance with the plaintiff's requirements".

Ken Moon, a partner at AJ Park, says that no organisation can commission software that's already in existence.

"Apart from commercial -- and legal -- common sense, the point is that such reusable library code was never commissioned by the client in any event -- you can't commission something which has already been written."

Under the Copyright Act, those who commission a computer program can never automatically get ownership of copyright for work that has been completed before the commission was given, he says.

Computerworld noted Moon's comments at the time of the original case (IP case tests code ownership) that "properly speaking" pre-existing code would have been owned by Pacific and licensed to Perry.

Moon says the Court of Appeal found there would be an implied licence granted to the client to use the library code that could never be revoked.

"This licence would be transferred to any subsequent owner of the commissioned software; for example, if Perry sold it to another company. The developer as owner of the copyright in the library code can thus reuse it as often as he likes without reference back to any clients for whom software has been written which incorporates that code," he says.

"It is not a landmark decision," says Moon. "Rather it has corrected a decision of a judge which might have been interpreted to mean library code would be owned by commissioning clients."

He notes the Court of Appeal's comment: "If Parliament had intended that draconian result it would have said so [in legislation]".

The real problem in the Perry case was that little was written down, say observers. Both the Appeal Court judgement and specialists like Moon and Auckland developer Ian Mitchell explicitly say that the better practice is to have a written contract in place spelling all this out.

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