Developer ordered to hand over source code

A row over software copyright ownership has resulted in Waikato conglomerate Perry Group taking Hamilton software developer Pacific Software Technology to court.

A row over software copyright ownership has resulted in Waikato conglomerate Perry Group taking Hamilton software developer Pacific Software Technology to court.

Perry Group has gained an interim injunction in the High Court forcing Pacific Software Technology to return source code for software it developed, pending a full hearing.

The dispute arose over whether database work done by Pacific had been commissioned by Perry Group subsidiary United Gaming, which sells and services gaming machines.

United Gaming uses database Q and A as part of a service providing monitoring and metering services for the machines, to enable their owners to record all their financial activities. Under this system, servicing and meter reading of the gaming machines is done manually and the results are separately audited.

Because of concerns expressed by the Department of Internal Affairs, which regulates gaming machines, United Gaming wanted to develop and upgrade the system to provide electronic collection and processing of data with an automated and independent audit of money flow.

Perry Group had an ongoing relationship with Pacific Software under which software projects habitually proceeded between them informally and without documentation.

Perry Group systems manager and accountant Stephen Burkhart maintains that the company always understood that it was commissioning work and would pay for it and that copyright in the programs developed belonged to Perry Group.

Between March and October last year Pacific developed a Visual Basic/Access database to enhance the existing Q and A database and some additional work was done including bug fixing. This work was paid for by United Gaming.

Later Pacific began developing an SQL database and there were ongoing talks about a possible joint venture for the development and sale of the SQL program. When those discussions foundered when United Gaming demanded the return of the VB/A database and the request was refused. Perry Group then issued proceedings in the High Court in October.

Pacific Software’s Michael Steele swore there was no request from or on behalf of United Gaming that the development in question be undertaken and there was no guarantee that the software, once developed, would be acquired by United Gaming.

While accepting that Pacific Software had undertaken commissioned development work for United Gaming on a number of previous occasions, he said the work undertaken in this case arose from his knowledge of United Gaming’s business requirements and the shortcomings of its existing systems derived from other work for the company. He said that the product, if not accepted by United Gaming, could have been successfully marketed to other parties in the industry.

However, the court said there was not enough evidence of this and that Pacific Software’s time records did not bear this out. It ordered the source code for the VB/Acccess database to be handed over. However, Pacific Software was allowed to keep a copy pending the main hearing. If during the trial the court finds that the copyright in the database belongs to Pacific Software, Perry Group will have to assign it copyright.

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