WHO OWNS A COMPUTER PROGRAM?
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In the United States, ownership of a computer program is determined by federal copyright law. According to federal law, the copyright is established automatically when the program is written.
If you are an independent computer programmer, you automatically have the copyright to the programs you independently develop. If you hire programmers, you will want to make sure that you will own or at least have the rights you need to use any computer program you have written for you.
Since the law provides that the "author" of the work owns the copyright automatically, a business owner who has paid a lot of money to have a custom software program written may be unpleasantly surprised to discover that the programmer owns the code. The business has rights to nothing, unless rights or ownership were obtained from the programmer in compliance with copyright law.
The following are just a few of the important points about copyright law:
1) The law covering rights to computer software is the same federal copyright law that covers books, poems, manuals, screenplays, art work, music, films, and other creative works.
2) Copyright laws give the copyright owner exclusive rights regarding the copyrighted work. Those exclusive rights include the right to copy the work, the right to create derivative works, and the right to publish, sell, or distribute the work. A copyright infringement action can be based on violation of any of the exclusive rights of the copyright holder.
3) A computer program which is a "derivative work" is one based on one or more preexisting programs. A derivative work can be a program translated from one language to another, or one adapted to a different platform, revised, improved, updated, or otherwise modified.
Since the right to create derivative works is one of the exclusive rights of the copyright holder, you cannot create a new program from an old one unless you own the original program or get the rights from the owner to create a derivative work.
If you are allowed to create a new program using a preexisting one, you still only own the additional work done by you. Unless you obtain ownership of the preexisting program or rights to publish and distribute the original work, you are unable to publish and distribute the derivative work you created.
If you hold the copyright to an existing program and you let someone other than an employee create a different version of that program, the programmer automatically has the copyright in the additional parts he or she added. The issue of ownership should be covered in the contract for the programming services.
4) Not all works are copyrightable. Not all portions or aspects of a work are protected by a copyright. In order to have copyright protection the work must be an "original work of authorship." The work protected must have been independently created (rather than copied) using a measure of originality.
Facts and ideas presented in a copyrighted work are not protectable. For example, the names of the states, or names in the phone book are not protectable. The selection and arrangement of the facts or data is protectable, while the data itself is not. Works in the public domain, such as "Uncle Sam" are not protectable. Functional aspects of a work are not protectable. For example, in a karate game, certain actions by the players will look similar to the actions in any other karate game because the karate moves are the same.
5) Possession of a computer program does not mean much. Just because someone has possession of a program does not mean they hold the copyright. It is important to determine who actually is the copyright holder before you spend time or money on an existing program.
6) You may obtain the rights to a computer program by purchasing the entire program including the copyright, by purchase of certain of the copyright holder's exclusive rights, or by licensing the rights you need. If you have programming work done for you, you should cover this issue from the very beginning. The purchase of a program or copyright rights must be in writing and signed by the copyright holder. Some programming work you have done may qualify to be treated as a "work made for hire," in which case, according to copyright law, you automatically hold the copyright. A work made for hire also requires an agreement in writing.
7) Any use of a copyrighted program beyond the rights granted is usually an infringement of the copyright. Although copyright law allows limited non-commercial use of a copyrighted work for the purposes of news reporting, criticism, research, and teaching, these uses, which apply easily to most literary works, have less application to computer programs.
Licenses
Since you have no right to use a program other than the rights granted to you by the copyright holder, it is important that you obtain a license that clearly sets out your rights. The following are some of the key issues that need to be covered in a license:
It is always important to set out these terms in advance of any work being done. To have a program developed without any agreement on ownership or licensing leaves a great deal of uncertainty. Ownership will be determined by copyright law, but the rights to use the program remain unclear. If you hire someone to create a program, you probably have an implied license to use it, but the terms of that license are unclear. A use beyond the implied license may subject you to a claim of infringement. For example, if you proceed to make modifications in the work that was created, you may face an infringement claim. You should feel quite restricted in any use until license terms are clarified or ownership of the program is transferred to you in compliance with copyright law.
An additional problem is that negotiating the transfer or license of a copyright after the work is done and paid for may be difficult. You have the most negotiating power when you haven't paid anything and you haven't signed anything and you don't need anything from a particular programmer.
Federal Registration
The author of a program automatically holds a copyright to the program from the time of its creation. There is no need to register your copyright with the Copyright Office in Washington, D.C. in order to secure your copyright. However, federal registration of a copyright does confer valuable benefits.
Copyright owners who wish to pursue infringers must federally register the program before filing a lawsuit against the infringers. If you wait and register the copyright just before you go into court, you would not have the key benefits of federal registration.
Important benefits of federal registration are statutory damages (of up to $100,000 per infringing act) and entitlement to attorneys' fees related to bringing the infringement action. Without the benefit of statutory damages, it is necessary to prove your dollar loss or the infringer's wrongful gain in order to get a judgment against the infringer. Without the right to have attorneys' fees paid by the infringing party, you must bear the cost of your legal action, without a right of reimbursement.
These key benefits are only available if you register your work within 3 months after first publication of the work, or at least prior to the actual infringement you wish to take action on. In order to obtain the benefits of federal registration, the owner of a copyright can easily take steps to register the copyright. Those steps are:
* Complete a simple application form;
* Send a fee of $20.00 for each application;
* Send a copy of the first 25 and last 25 pages of source code, with a page containing the copyright notice. If the program is less than 50 pages in length, the entire program source code should be provided. This copy "on deposit" will be held by the Copyright Office.
Information, forms, and other valuable information on copyright registration is available on the Copyright Office's website at http://lcweb.loc.gov/copyright.
Since owners of computer programs may be concerned about protecting the secrecy of source code, there are special rules which allow portions of a computer program to be deposited with the Copyright Office rather than the entire program. You may include a cover letter stating that the copyrighted material contains trade secrets, and block out certain portions of the code provided to the Copyright Office, in accordance with the rules for programs containing trade secrets.
Copyright Notice
Copyright law no longer requires the use of a copyright notice in order to obtain the benefits of copyright protection. However, it is still important to place a proper copyright notice on all published works to put users on notice that you claim a copyright in the work. While the lack of such a notice no longer jeopardizes your copyright rights, it does limit your ability to pursue an infringer on the basis of the infringer's intentional infringement of your rights.
It is not necessary to federally register a copyright in order to place a copyright notice on a program. The copyright notice states who owns the copyright, whether based on the automatic rights of the developer, or on a transfer of ownership. All programs in which you claim a copyright should bear a copyright notice.
The Copyright Act provides that a copyright notice should contain the following:
(1) the copyright symbol (the letter "c" in a circle) or the word "Copyright" (or the abbreviation "Copr.");
(2) the year of first publication; and
(3) the name of the owner of the copyright.
A proper copyright notice requires the name of the owner of the copyright, not the name of the author, if the author is not the owner. The date of the copyright is the earliest date of publication of a work, not the date it was written.
A computer programmer who claims a copyright in a software program must consider that pirated copies of software may be separated from labels and manuals, so that notices in the program itself are important. The notice should be displayed when the user starts the program and should appear with the title of the program.
Copyright 1999 Mary Hanson. All rights reserved.
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Mary Hanson, MBA, Attorney at Law (310) 543-1355 Torrance (Los Angeles County), California USA