Who owns your computer program or mobile app?

Unlike trademarks, patents and designs, copyright is the only form of intellectual property (“IP”) in South Africa that does not require registration for copyright protection to subsist in a protected work. The subsistence of copyright only requires that such work comply with requirements for copyright that are general (relating to the work itself) and specific (relating to the author of the work). Compliance with such requirements causes copyright to automatically vest in the author and / or subsequent copyright holder.

To determine who is the author or creator of a computer program is however somewhat complex.  This is further complicated if a company outsources the creation and / or development of the work to an independent person or company.  The example and resulting scenarios explored below is useful in illustrating this complexity.

Imagine you (your company) came up with an idea for the development of a software program or mobile application.  You contract a software development service provider to develop the software program.  After further discussion, the service provider advises you that, while they can develop the ‘packaged’ and modified portion of the software, they need to engage the services of a more technically skilled software developer to develop certain bespoke or custom – made developments required in the software program.  In the development of the software program, you engage continuously with the service provider and software developer providing specifications of requirements for the end product.  The service provider provides input in the creation of the bespoke elements of the program and provides instructions to the software developer who in turn is responsible for the coding.  Upon completion and testing of the software program it is successfully implemented and you pay the service provider their agreed fee which includes the fee of the software developer.

Since you paid for the software program, it would be fair to assume that the copyright thereof would vest in you.  The determination is however more complicated and different scenarios, as explored below, may exist.

• Unless a written agreement stating otherwise was concluded, the service provider would retain ownership of the copyright in the packaged and modified portion of the software because they exercised control over the development and modification thereof.
• Ownership of the bespoke elements of the software program will likely vest in the software developer.  This determination will however be influenced by the extent of your and the service provider’s involvement in the development process and giving direction to the software developer.  It is likely however that the service provider would be considered to have exercised control over the development of these bespoke elements and would therefore be regarded as the author and first owner of the copyright therein.
• The possibility further exists that you may have joint ownership of the copyright with the service provider and software developer.

Ensuring that you in fact own the copyright in your software program (or mobile application) is important as it would provide you with the rights to commercialise the software, modify the software or even make adaptations thereto without restrictions.  In addition, as the owner of the copyright, you will have the right to institute legal action to stop any possible infringement thereof.

Section 1(1) of the Copyright Act 98 of 1978 (“the Copyright Act”) defines the author of a computer program as the person who exercised control over the making of the computer program.  The issue was considered in the case of Haupt t/a Soft Copy v Brewers Marketing Intelligence (Pty) Ltd and others wherein the Court determined that ‘control’ meant ‘the fact of controlling, or checking and directing action’ and reiterated that ‘one does not need to be a computer programmer to be able to control the writing of a computer programme’.

The Court’s above view suggests that, for the vesting of authorship, a position of authority, continuous involvement and physical direction of the activities involved in the development of the computer program is required.

As illustrated by the example above, the issue of the determination of authorship and ultimately copyright ownership in a software program or mobile application can become complex and will require determination having regard to the facts of each case.  As can be seen from the above, the mere commissioning of the development of a software program may lead to the unintended consequences that do not give rise to the intended commercial intentions in respect of ownership and the transfer of IP rights.

For this reason, it is of vital importance that a suitable software development agreement, including appropriate assignment clauses, is concluded with any service provider or software developer to regulate the various issues involved in the development of a software program particularly the issues regarding copyright ownership.