24 October 2013
A software company provides a software exclusively for a public limited company for a price. The software is accessed from the public company's website. The public co. wants to make copyright/patent for the software.
Should the public company make an agreement with the software co. that it wont sell the software service to another company ? if yes, should the agreement be in a stamped paper or letter head of software co. ?
Can such software be copyrighted by the public co. ?
20 July 2024
In the scenario described, there are a few key aspects to consider regarding the copyright of the software and the agreement between the software company and the public limited company:
### 1. Copyright Ownership:
- **Software Company's Ownership:** By default, the software company owns the copyright to the software they have developed. This includes the rights to reproduce, distribute, and modify the software unless these rights are specifically transferred or licensed to another entity.
- **Public Limited Company's Use:** The public limited company (customer) uses the software under a license agreement, typically granting them certain rights to use the software as per the terms agreed upon with the software company.
### 2. Agreement for Exclusivity:
- **Agreement for Exclusivity:** If the public limited company wishes to ensure exclusivity or prevent the software company from providing similar software services to competitors, they should negotiate and enter into an agreement with the software company. This agreement would typically include terms related to exclusivity, non-disclosure, and possibly non-compete clauses.
- **Form of Agreement:** The agreement should ideally be drafted on a stamped paper or a legal document format that is recognized and enforceable under the local laws. While letterhead may be used for initial communications and proposals, formal agreements should be on stamped paper to be legally binding.
### 3. Copyright and Patent:
- **Copyright:** Copyright protects the expression of an idea in software (the code itself, not the functionality). The software company, as the creator of the software, automatically holds the copyright. The public limited company does not generally acquire copyright by using or paying for the software.
- **Patent:** Software patents are more complex and vary by jurisdiction. In some countries, software functionalities or algorithms may be patentable if they meet specific criteria of novelty, inventive step, and industrial applicability. It's advisable to consult with a patent attorney to determine if patent protection is feasible and advisable for the software in question.
### Conclusion:
- **Agreement Importance:** Yes, the public limited company should enter into an agreement with the software company to secure rights and ensure exclusivity if desired. This agreement should be on stamped paper or an equivalent legal document format.
- **Copyright Ownership:** The software company retains copyright ownership unless transferred or licensed to the public limited company explicitly.
- **Patent Consideration:** Patenting software functionalities is complex and depends on jurisdiction-specific laws and requirements. Consultation with a patent attorney is recommended for specific advice.
To proceed, it's crucial for the public limited company to engage legal counsel to draft and review the agreement with the software company. This ensures all rights and obligations are clearly defined and legally enforceable.
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