Court confirms copyright in software belongs to the author of the software, not the client who commissioned it, unless the author expressly transfers it

In a case with complicated facts the court has, yet again, ruled that, without an express clause in a contract between two businesses about who owns copyright in work done by one of them for the other, it belongs to the business that did the work.

This is a common problem, as a business commissioning and paying another to carry out work for it ('the client') often assumes that copyright in that work will belong to it. In fact, copyright only belongs to the client if the business doing the work transfers ('assigns') the copyright to it in writing.

Alternatively, the business doing the work may grant its customer a licence to use to the copyright for certain purposes, but keep ownership for itself. A court may, sometimes, imply the grant of a licence, even though there is no express grant in the contract between them, on the basis that the work is useless to the client without such a licence. However, it is very rare indeed for it to imply a transfer of ownership.

In this case, a business developing software for a client had taken the work over from another company that had failed to produce the software, with the complication that the agreement with the new business cross-referred to the agreement with the old company, and there were complex provisions about ownership transferring if the software was sold.

Even so, the court stuck to the usual rule that, "even where a work the subject of copyright is commissioned, the copyright is vested in the author(s) of the work, unless there is an express agreement to the contrary or such an agreement arises by necessary inference".

Recommendation
Businesses commissioning any work that could result in creation of intellectual property rights such as copyright should make sure there is a written agreement between them and the author of the work, making it clear who owns those intellectual property rights.

Case ref: Infection Control Enterprises Limited v Virrage Industries Limited and Aidan Cartwright, [2009] EWHC 2602 (QB)