Introduction

Dr. Brian Bandey is one of the world's leading experts on Computer Law and the International Application of the Law of Copyright to Computer and Internet Programming Technologies.

In this Section Dr. Bandey shares some of his experience as he looks at some of the Copyright Issues that surround the commercial development of Computer Software Products.

Computer Software Products as Property

Although often described as "Intellectual" or "Intangible" Property, Computer Software Products of complexity are classified as a form of "Personal Property". As such, they can be understood as a standard corporate asset bearing value as any other.

A Software Develope portfolio of Computer Software Products will be essentially Copyright Works (mixed with Statutory and sui generis Database Rights).

They will be the Most Important Asset held by the enterprise and, as such, they should be the Primary Objective of Protection and Value Enhancement.

Intellectual Property Ownership of "Product Associated Property"

There is a great deal of important Intellectual Property which, whilst not the Computer Software Products themselves, will be intrinsic to the commercial exploitation of them. These include Trademarks, Marketing Collateral, URL's and the Software House's Internet Site.

Some Statements of International Intellectual Property Law

  • Different Legal Jurisdictions recognize and produce different "bundles" of Copyright rights.1
  • Intellectual Property authored by a Subsidiary Company is NOT the property of the Parent Company.
  • Intellectual Property authored by one Associated Company is NOT the property of any other Associated Company.
  • Ownership of Copyright Works may only be transferred "In Writing".
  • Intellectual Property owned by a Subsidiary Company CANNOT be exploited by the Parent Company nor the Sister Companies without a license.
  • Intellectual Property owned by a Parent Company CANNOT be exploited by the Subsidiaries without a license.
  • The use of "Implied Licenses" to gift legal capacity from Parent Company to Subsidiary is a High Risk Activity.
  • The commissioning of the creation of Intellectual Property from a 3rd Party does not necessarily mean that the commissioner will own the work.
  • No matter what country in which authorship takes place ALL Copyright Works should be registered with the US Copyright Office.

The Need to Consolidate and Protect Copyright

  • Fragmentation impedes Defence and Enforcement2
  • Fragmentation invites both Proper & Improper Due Diligence Inquiry & Disquiet
  • Fragmentation prohibits Value Building ('the sum of individual copyright works is greater than the whole')
  • Fragmentation prohibits Value Building by preventing the works being consolidated in a Broad, Effective, Internationally-Respected Intellectual Property Regime.
  • Fragmentation prohibits any Group Company from having the legal capacity to enter into Licenses
  • Fragmentation defeats Liability Containment Strategies for Subsidiaries3
  • Consolidation is the ONLY answer to all of the above.

Consolidation and Intellectual Property Management

  • Usually, a Software Developer's Intellectual Property will be held by Front-Line Trading Companies - It should not be.4 Subject to Financial, Taxation and Revenue Strategies; it should all be moved and consolidated into a non-trading person.
  • Copyright Notices (especially the 'Universal Copyright Symbol' - ©) in the Source Code of all Software Products should be changed so that it is representative of the new owner.

    © 19XX - 2010. Copyright Owner International Holdings Limited Inc Pty. All Rights Reserved.
  • Intra-Group Company IPR Assignment and Marketing Agreements should be put into place which:

    • Collect all existing and future IP and consolidate them in the IP owner;
    • Grant Trading Companies sufficient Legal Capacity to deal in Marshal8e6 Products and Trademarks;
    • Ensure those Trademarks which cannot be owned outside of their enabling Legal Jurisdiction are held on trust for the IP owner.
  • The Authors of Intellectual Property are usually Employees. Inadequate Employee Agreements can totally defeat any Corporate IP Strategy. Accordingly:-

    (a) All Employment Agreements need to contain effective Intellectual Property Assignment Provisions which support the Local Statutory Infrastructure in transferring IP created in the course of employment from the Employee to the Employer; 5

    (b) All Employment Agreements need to contain effective Intellectual Property Assignment Provisions which go further. IT employees often create competitive computer products (often in cooperation with other employees) outside of their employment - often as a form of personal exit strategy. Accordingly, their Employment Agreements need to gather up the IP generated in such 'out of hours' activities.

  • Any Corporate Intellectual Property Management Strategy must include a component which causes 3rd Party creators of IP6 to assign it into the commissioning Company.

Intellectual Property Management - Licensing Policies

  • The Purpose of Group Licensing Policy is to support the overall Group Intellectual Property Strategy. For example:

    • The Reverse Engineering of Product by Licensees should be prohibited;
    • No Exclusive Licenses should be granted;
    • No Perpetual Licenses should be granted;
    • No Licenses that defeat the concept of Ownership and Value Building should be granted;
    • Source Code licensing takes place only in conjunction with strict security measures.