Do you own the computer software that you have paid to
be developed by an independent computer
In most cases, people will say "Yes, I own it".
However, through a combination of legislative rules about the
ownership of copyright under the Copyright Act and the manner in
which most software developers operate as an independent
consultant, it is likely that the answer should be
If you appoint a software developer who runs his or her own
business to create a new application or software product and even
you are paying that developer to do the work;
the code is based on your concepts, specifications and design
of the program, and
you give the developer a schematic plan of how the program
when the developer creates the software code for that concept or
specifications, the developer owns that code. This is because
the software developer is usually an independent contractor and the
Copyright Act stipulates that the author of original
"work" (which is defined in the Act to include
computer code), is the owner of that work. The software
developer as a contractor would own his original
You might suggest that there was a clause in the consultancy
agreement or proposal which you entered into when commissioning the
work that states clearly that "the software code and all
intellectual property in the software code when created belongs to
the business owner". Unfortunately, while the
intent is there, such a clause will not ensure that you own what
the consultant is developing for you.
There would have to be either wording in the consultancy
agreement or proposal going one step further to specifically assign
the intellectual property in question to you or alternatively,
there could be a separate document in writing transferring that
copyright material prior to or once it has been developed.
The Copyright Act prescribes the manner in which copyright material
must be assigned and if there is no assignment in writing by the
assignor and the assignee, there is no assignment at law. The
wording suggested above does not achieve the actual
assignment. Whilst there may be an implied right to ownership
of the code, you have to take further action to acquire that
The position changes where the software developer is an employee
and works for you in-house for the purposes of developing the new
software code or product. In most cases, the software code
developed in-house will belong to the developer's employer and
not the employee. This is specifically provided for in the
Copyright Act but there are some conditions that need to be
met. To ensure that you fall within the parameters of the
Act, you should have an employment agreement with a clear job
description, provisions regarding the ownership of the intellectual
property he/she develops and even a restraint of trade if the
software product is very valuable along with confidentiality and
other general provisions.
If you have appointed a software developer as a consultant to
develop software code for a particular application or a new
product, go back to your documentation to make sure you own what
the consultant has developed or is about to develop for
This is particularly important if you ever wish to sell your
business or simply exploit the software program or product in the
future. Contact Jacqui on 3135 0682 if you need some
assistance with your review of your consultancy documentation.
This publication does not deal with every important topic or
change in law and is not intended to be relied upon as a substitute
for legal or other advice that may be relevant to the reader's
specific circumstances. If you have found this publication of
interest and would like to know more or wish to obtain legal advice
relevant to your circumstances please contact one of the named
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