Nobody wants to put a lot of blood, sweat and tears into a software development project, only to find someone else owns the copyright in the results.
But it could be a trap for unaware software developers.
AJ Park & Son partner Ken Moon says if you’re self-employed, then it’s fairly clear-cut under the Copyright Act — you own the copyright in the program you produce.
And even if you do work for a software development company, you can still own the copyright in your program as long as you worked on your concept at home and in your own time.
Moon says legislation allows people to moonlight and own the results of their work.
The situation is also fairly clear if you’re a programmer working for a software development company — as an employee, your employer will own the copyright in the program.
The exception is when the people involved have an agreement which differs from the Copyright Act. For example, a programmer would be free to have an agreement with his employer to say he would own the copyright in the software he wrote, although Moon points out that few employers would be likely to agree to that.
The true confusion begins if the program you’ve developed is tied up with a project that your employer has, for example.
“You do have to be a bit careful. It’s a pretty grey area and the courts will look at how much knowledge was used that actually came from your work place. Or were you using your employer’s computer system? That mightn’t be the decider — it might be: were you only using your employer’s computer system outside normal hours?”
Moon says the courts may decide it’s the employer who owns copyright, and not you.
He says a number of companies have employee agreements and any employee thinking about developing their own concept in their own time should check the agreement, particularly if there are any clauses that relate to intellectual property.
“It might say that intellectual property in all software development while employed here belongs to the company, and mightn’t make it clear that that’s only where you’re in the course of your normal employment.”
Moon says if you think the terms are too tough and that your employer might end up owning some of what you do — even at home — then you should talk to them, and try to get a separate agreement.
In New Zealand Moon says the main problem in this area has occurred with that part of the law which says that a customer who pays a software house to develop software owns the copyright. The act calls it a “commissioned work”.
“It’s like commissioning someone to do a painting.”
Moon says there have been a few battles between software houses and companies which have commissioned them about who owns the copyright in the software.
Moon says the problem has arisen largely because the rules changed with the Copyright Act of 1994. Prior to that, the 1962 act stated the software developer owned the copyright.
Royalties are also an issue for a software developer. Publishing agreements with software publishers can outline, for example, that the publisher takes over the ownership of copyright in the developer’s program, or that the developer licenses the publisher and in return it will give the developer a royalty based on the number of sales made.
There are no guidelines as to the size of the royalty — it’s up to developers to get the most they can from the publisher.