What is copyright?

It is an internationally recognised legal principle that is broadly applied for the protection of original literary, artistic and other works. It grants the copyright holder exclusive rights in respect of the protected works for a limited (but generally quite long) period.

In the EU and the US, original computer programs are protected as “literary works”. The protection extends to preparatory materials and both source and object code.

The protection given by copyright is automatic.  It does not have to be registered in a national registry to be effective. This contrasts with, for example, trademarks and patents where registration is required for most protections to apply. Further, there is no legal requirement to keep the works confidential in order for the protection to apply, but practical constraints often dictate that coding is nonetheless kept as confidential as possible.

Copyright protection only applies to the preparatory documents and the coding of computer programs, and does not protect concepts behind the software.  The European Court of Justice has recently confirmed in a landmark judgment that copyright protection rarely applies to the GUI of any program unless it is sufficiently original.

Who owns the copyright?

Original ownership of copyright can be a contentious issue in respect of software, even though the concept is quite straightforward.

Under copyright law, it is the “author” of the software who first owns the copyright to that software. The author can in turn allow other people to use the software by:

• Licensing the copyright to other people. That is, the author can allow other people to use the software on certain terms which can be limited by the author. A “license” can be express or implied, and does not need to be in writing.

• Assigning or transferring ownership entirely to another person. In many jurisdictions, including Ireland, full ownership of copyright can only be transferred by an agreement in writing.

Contractor –v- Employee - who owns it?

If the individual who created the software is working for themselves, then they are clearly the author and therefore hold the copyright to the software. If they are an employee and create the software during the course of their employment, then their employer is deemed to be the author of the software and the person or entity that holds the copyright.

However, if a person commissions a contractor to develop software for them, or even just to contribute some coding, then that contractor may still hold the copyright to that software even where they are paid for their work. Similarly, if the individual who create the software did so on their own time and outside of their normal duties as employees, then they may hold the copyright to the software even if the software is subsequently used by their employer.

As noted above, the only way to transfer full ownership of copyright is by an agreement in writing. It is therefore critically important that anybody engaging contractors have an agreement in writing, explicitly transferring ownership of copyright.

What rights does copyright give?

Copyright gives the holder the right to prevent someone from infringing their copyright and to claim for damages in the event that someone does infringe their copyright. Generally, copyright is infringed if any person, without the consent of the holder of the copyright:

1. copies of the software (whether by installation or otherwise);
2. makes the software available to the pubic (whether by distributing the software); or
3. adapts or amends the software (except in certain limited circumstances).

In practice, copyright is infringed if someone, without the express or implied consent of the copyright holder, uses, copies, distributes or adapts the software.  These are very broad rights and copyright is therefore quite a strong protection for the holder of the copyright.  The courts are active and sympathetic on the protection of copyright where copyright has clearly been infringed.

What are the limitations of copyright for software?

While copyright is a useful protection for software, it does not provide absolute protection. There are a number of limitations to copyright which must be addressed by taking other, further steps to complement and reinforce the protection given by copyright and to ensure that no unintended rights or competitive advantages are given away.

1.  When the owner of software gives a copy of that software to a customer, there can be considerable uncertainty as to what rights have been given by the owner to the customer. This uncertainty can include:

• Does the customer have to pay for the software? If so, on what basis?

• Has complete ownership of the software been transferred to the customer?

• Where, when, how often, for how many people and for how long can the customer use the software, and for what purpose?

• Can the customer allow anybody else use the software? If so, who?

Any uncertainty on these matters works in favour of the customer and against the owner. Some or all of the ownership of the software by the owner by inadvertently leak in this manner. It is therefore critical that clear and comprehensive licence agreements be put in place which expressly set out and limit the rights of the customer to the software on the terms commercially agreed.

2.   As noted above, copyright only protects the preparatory documents and the coding of computer programs, and does not protect   concepts behind the software. There is no prohibition under copyright on a third party from replicating the process in a computer program by developing his or her own original program. Accordingly, source code should never be disclosed for confidentiality purposes as copyright does not protect the concepts behind the source code. 

3.   There is no statutory prohibition on reverse engineering software. Accordingly, third parties are also free to reverse engineer software unless contractually prohibited from doing so.

4.   Copyright does not protect the name or branding of any software. If there is any branding then trademark protection should be considered.