In an age where the internet and Google are so prevalent, having an online presence for your business has never been more important – but does your business own its website?
Indeed, most businesses whether big or small will have some sort of website – from simple “information-only” websites to more sophisticated e-commerce websites capable of processing high volumes of various transactions.
The importance of having a website is widely recognised with many businesses investing significant amounts to create, maintain and develop their websites. It, therefore, comes as no surprise that websites can generate significant income and value for a growing number of businesses.
However, does your business own its website?
It may seem a strange question to ask but it is not uncommon for a business to not actually “own” the intellectual property rights which exist in its website or even have sufficient rights to use it as it wishes. This worrying fact often comes as a surprise to most (not least to those it may affect).
The principal intellectual property right applicable to websites is copyright. Generally speaking, the common components which together make up a website (including text, images, videos, screen layout and background source code) will usually attract copyright protection.
Copyright exists automatically and as a general rule if material attracting copyright protection is created by an employee during the course of their employment then the copyright will belong to the employer.
However, where copyright is created by a third party (such as an independent web-developer) then the general rule is that, in the absence of an agreement to the contrary, the copyright will vest (i.e. “belong”) to that third party. It is a common misconception that copyright ownership automatically follows payment.
Therefore, if a third party has developed your website (or any part of it) and there is no agreement in place then the chances are you do not own your website (or parts of it).
Always ensure that you have an appropriate agreement in place
When engaging a third party to develop or work on your website it’s important to ensure that an appropriate agreement is put in place, preferably at the outset and before any money changes hands.
It is not always possible to obtain absolute “ownership” of the copyright in your website as the developer may have its own generic source code which it uses as the foundation for all the websites it develops. In these circumstances it’s important to secure a perpetual licence (i.e. a never-ending permission to use) on terms which provide sufficient rights for you to use, develop and adapt the copyright (and any other intellectual property rights) as you wish and as if you were the owner (albeit the developer retains the ultimate ownership). A well-drafted licence is the next best thing and can be akin to “ownership”.
Any deficiencies in website ownership/rights will often be picked up by a buyer when the business is being sold and buyers will often insist that any such issues are rectified prior to the purchase by way of an assignment or licence from the original developer. If you ever find yourself in this position then you could find yourself held to ransom by the developer (especially if it gets wind of an impending deal) and we can help you with an effective strategy to approach the developer to minimise this risk while providing the buyer with the comfort they need.
If you want help with an agreement with a website developer or have any questions about the ownership of the intellectual property rights in your website, then please contact Alex Clifton on 0116 281 6232 or email firstname.lastname@example.org.
Categorised in: Corporate and Commercial, IT & Telecoms, NewsTags: Commercial Agreements, Commercial Law, Company Law, Copyright, Intellectual Property, Mergers and Acquisitions, Software Contracts, Software Licensing