As software becomes the lifeblood of modern businesses – especially in start-ups and rapidly scaling ventures – understanding who actually owns the code is crucial. Whether you're an employer, developer, or founder, navigating the interplay between authorship and ownership can significantly impact your venture's intellectual property strategy, its commercial viability, and your personal liability. Clear contracts and a solid grasp of the legal framework surrounding software copyright can spell the difference between smooth growth and costly disputes down the line.
Software and Copyright
Software, in its most basic form as code or source code, is protected by copyright in terms of the Copyright Act 98 of 1978, as amended. Section 1 of the Act includes "computer programs", in simple terms this means that software code, whether in source or object code form is automatically protected by copyright, provided it is original and fixed in a tangible form.
The exclusive rights conferred upon the copyright owner include the rights section 11B. to reproduce, publish, adapt, and communicate the work to the public. Importantly, copyright protection arises automatically upon creation, without the need for formal registration (some jurisdictions do allow for registration).
Distinction Between Authorship and Ownership
Authorship
Under South African law, the author is the person who creates the work. In the context of software, this would typically be the developer or programmer who writes the source code.
Ownership
While authorship refers to who created the work, ownership refers to who holds the economic rights (as opposed to moral rights) in the work. These are not always the same person.
According to section 21 of the Copyright Act, ownership vests in the author, except in certain circumstances, for example:
Employment: Where an employee creates a work in the course and scope of their employment, the employer is the copyright owner, unless the related contract provides otherwise (section 21(1)(d)).
Assignment or Licensing section 22 of the Copyright Act: Copyright can be transferred by way of a written assignment or licensed to another party for specific purposes.
In King v South African Weather Services (716/2007) [2008] ZASCA 143 (27 November 2008), the court considered both authorship and ownership in relation to software created by an employee. Under section 21(1)(d) of the Copyright Act, where a work is created in the course and scope of employment, the employer is the owner of the copyright – unless there is a written agreement to the contrary.
[19] "Another important aspect to consider is the nature of King's duties in terms of the employment contract. In this regard the matter must be looked at broadly and not by dissecting the employee's task into its component activities.16 His duties changed over the years but one would not ordinarily include computer programming as part of the duties of a meteorologist. However, that is not the full picture. As meteorologist King had to collect and collate meteorological data and transmit it to head office for analysis and storing. He developed his programs for this very purpose. Although he may have done it to make his own job easier, he did it because of his employment with the Bureau.."
[20] "This leads to another and most significant factor. It is clear that but for his employment with the Bureau, King would not have created these works. There is, accordingly, a close causal connection between his employment and the creation of the programs. In other words, his employment was the causa causans of the programs. Some of the programs were specifically written for other weather stations of the Bureau at their request and for their use. They were not created for external use by others; instead, they were purely work related. Importantly, the Bureau prescribed the format of the programs and had to approve of them before they could be implemented and used in the system."
This is of particular importance for software developers and start-up founder working on side projects and or software applications that relate to their current employment, as it poses a significant liability and risk should this fall into the "scope of employment" in terms of section 21(1)(d) of the Copyright Act.
Practical Implications for Software Companies and Developers
To avoid future disputes, software development projects whether in-house, worked on part time, or outsourced should be governed by clear and written contracts that explicitly address the following at a minimum:
- " Who will own the copyright in the final software;
- " Whether the developer will retain any rights;
- " The licensing terms for use, resale, or sublicensing of the software;
- " Provisions related to confidentiality and trade secrets, which often accompany copyright concerns.
A lack of a written agreement may result in costly litigation over copyright ownership, especially when software becomes commercially valuable. As always, contracts should be carefully drafted and curated to reflect the true intentions of the parties. Failure to do so may have dire consequences, including the loss of ownership over critical software assets, which in turn could affect the entire viability of the business.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
