Copyright Act change shifts software rights

A change in New Zealand's copyright law will see software developers owning their software by default, even when that software is commissioned, and that has led one industry leader to warn of potential abuse.

An amended Copyright Act -- the Copyright (Commissioning Rule) Amendment Bill -- that would repeal the commissioning rule for software developers was introduced to Parliament last week as a Bill by associate commerce minister Judith Tizard.

The general rule is that the creator of an artistic work or software holds the copyright to it. However, the commissioning rule, which has been an exception to this, means that the commissioner of a work is the default copyright holder, says a government press release.

If enacted, the Amendment Bill will have significant benefits for local contract software developers, says Clendons Barristers & Solicitors senior solicitor Guy Burgess, who is also trained as a programmer.

Under the current rule, software developers have no rights to code developed for clients unless there is a contract in place saying otherwise.

"If, over time, a project grows into valuable software, the contractor who wrote it may find he or she has no rights to it. Even if they wanted to release the project as open source software, that decision would be up to the client, who as commissioner of the software would be the owner," says Burgess.

The change would remove a source of danger for local developers, he says. If the Bill is passed, there would be a transitional period, and existing contracts would not be affected by the change, says Burgess.

But New Zealand Computer Society chief executive Paul Matthews says that the effect of the Bill should be minor in the professional software development process.

"...most development from reputable individuals or organizations is subject to a contract or agreement that makes clear the copyright and intellectual property ownership. The Bill only changes the default position if no agreement is in place," says Matthews.

He also points out a potential concern. There is a risk of abuse if clients are dealing with unethical organizations or individuals, and an agreement outlining the IP position is not in place, he warns.

"For instance, under the changes, if a company now contracts a web designer to create a website for them and there is no agreement in place to the contrary, the web designer would retain copyright over the webpage -- even though it was created for the company and there would normally be an 'expectation' that the company would own it. This could mean that the company is locked into the single designer for all future work on the website which could lead to any number of significantly bad situations," he says.

His organization recommends that a written agreement is always in place when work is commissioned, he says.

The recommendation to repeal comes after consultation in 2006 and 2007.

According to Tizard, the amendment aims to simplify the law by ensuring consistent application of default copyright ownership across all categories of commissioned works.

The contracting out clause of the Act will be retained. "What will not change with a repeal is the ability for either the creator or the commissioner to negotiate out of the default rule," she says.