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Legal protection for Software and Documentation

The provisions of the Copyright Act 1968 (Cth) broadly state that, in absence of an agreement to the contrary, the first owner of copyright in a computer program and any documentation is the individual who wrote it, or if that individual wrote it in the course of their employment, then the employer of the individual that wrote it is the first owner of the copyright. It is important to note that the person who commissioned and/or paid for the computer program or documentation to be created for it (the customer) is NOT the first owner of the copyright in it.

In order for the customer to be able to do any acts that are the exclusive right of the copyright owner (set out in the next section) the customer must either:

be granted an express licence in the agreement, in which case the customer’s rights will be limited to those rights (and any rights granted by law); or
have the intellectual property rights assigned to the customer in a written agreement, in which case the customer is then entitled to exercise all of the exclusive rights of the copyright owner to the exclusion of all others (including the ICT supplier).

Without an express licence (or an assignment of copyright) the customer will only have an “implied” licence to use the computer program and documentation. The extent of that implied licence will be determined from the circumstances of the transaction. Given recent case law it would not be wise for a customer that did not have an agreement with the ICT supplier to assume that it would have any of the following rights:

to further develop the software or documentation;
to correct errors in the software or documentation (through any person other than the owner of the copyright); or
to commercialise the software or documentation,

even if the customer has paid significant fees to the ICT supplier to develop the software and documentation specifically for it.

Whilst the law relating to who is the first owner of copyright may assist the ICT supplier when dealing with the ICT supplier’s customer, it hinders the ICT supplier in its dealings with the ICT supplier’s sub-contractors. This is because when applying the rule to the sub-contractor’s work it is clear that when a person who is a sub-contractor creates computer program or documentation for the ICT supplier the copyright in the computer program and documentation is first owned by the person who wrote it, or if it was created in the course of that person’s employment, it is owned by his employer (i.e. the sub-contractor) (in absence of an agreement to the contrary). Accordingly, it is essential for the ICT supplier to have an agreement with its sub-contractors that either:

(a) assigns intellectual property rights in the work created by the sub-contractor to the ICT supplier; or

(b) grants a licence to the ICT supplier that enables the ICT supplier to copy, adapt, modify the computer program and documentation and sub-licence all the appropriate intellectual property rights to the ICT supplier’s customer.

In all cases the ICT supplier must acquire all the rights from the sub-contractor that the ICT supplier agrees to grant to its customer. Accordingly, if the ICT supplier is assigning all intellectual property rights in the deliverables to the customer the ICT supplier must, at a minimum, acquire an assignment of all intellectual property rights in any materials that are created by the sub-contractor which are incorporated into the deliverables.

Computer programs and documentation are protected as literary works under the provisions of the Copyright Act 1968 (Cth). The Copyright Act grants the owner of the copyright a number of exclusive rights. These rights include the right to:

1. reproduce the works in a material form (copying);

2. publish the work;

3. perform the work in public;

4. communicate the work to the public;

5. make an adaptation of the work (modifying the work, including converting it to a different computer language);

6. enter into a commercial rental arrangement in respect of the program; and

7. do in relation to the work that is an adaptation of the first work, any of the acts specified above.

This means that the owner of the copyright in any computer program and documentation can prevent any other person from doing any of the things described above without obtaining the owner’s consent.

There are some limited exceptions to these exclusive rights. These exceptions include:

1. limited fair dealing rights;

2. temporary reproductions made in the course of a communication;

3. temporary reproductions as part of a technical process of using reproduction;

4. normal use or study of a computer program;

5. taking a back up copy;

6. reproducing the computer program to make interoperable products;

7. reproducing the program to correct errors; and

8. reproducing the program for security testing.

All of these exceptions are relatively limited in nature and are subject to specific provisions in the Copyright Act. A number of these exceptions cannot be excluded by a contract. This is a particularly complex area of law and you should seek specific legal advice if you believe any of these issues apply to your circumstances.

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