Who owns the IP rights in software is often a hot topic of negotiation between customers and software developers as this will determine who can use and commercially exploit the software. Key points:
- a number of different IP rights may exist from patents to trade secrets, but the most common and potentially most valuable will usually be copyright;
- IP created by an employee during the course of their employment will automatically belong to the employer, not the employee, but it is still important that your employment contracts are explicit about how and when IP ownership arises;
- the position for consultants is the opposite to that of employees. Unless the contract states otherwise, if the consultant/developer creates the IP, then they will own it. So it is even more critical to ensure the consultancy or software development agreement clearly states that any IP created by the consultant/developer will be automatically assigned (transferred) from the consultant/developer to the client;
- collaborations will need particular consideration as the position on ownership may not be clear;
- using open-source software or other third party software can complicate your ownership rights, so check the terms of any licence for these;
- if you won’t automatically own the IP, and can’t get an assignment (transfer) of the rights to you, then make sure you have a licence allowing you to use the software in the way that you need to for as long as you need to; and
- a well-drafted development agreement is essential.