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Source code refers to textual commands that a developer or programmer writes, which a computer then translates and runs as a program. These programs can range from software to your business website, which means that source code can be a valuable asset for your business. However, if you do not write the source code yourself, you may be unclear as to who owns the code itself, as well as the program it runs. For some guidance, this article will explain who owns source code in New Zealand.

Intellectual Property in New Zealand

Your business owns its intellectual property, similar to how it owns its physical property. However, intellectual property qualifies as an intangible asset. The term refers to your business’ ideas and original works that bring value to your activity and that you can profit from. When you have intellectual property rights, you can stop other people from using your intellectual property without your permission. In New Zealand, these rights include:

  • trade marks;
  • copyright;
  • patents;
  • trade secrets; and
  • designs.

For some of these rights, you need to register with the Intellectual Property Office of New Zealand (IPONZ) to receive their protection. Others apply inherently according to the kind of intellectual property you create.

For example, you may have registered trade mark rights protecting your business name or logo.

How Copyright Applies to Source Code

Copyright is a kind of intellectual property right that automatically applies to an original work (which means that it is not a copy) as soon as someone creates it. The kinds of works it applies to include:

  • artistic works;
  • literary works;
  • sound recordings;
  • dramatic works;
  • films;
  • musical works;
  • communication works; and
  • typographical arrangements of published editions.

In terms of source code, it qualifies as a literary work that a developer has written both for other humans to read and a computer to execute. 

In most cases, the owner of a copyrighted work is the person that created/wrote it. Therefore, if no other circumstances affect the situation, the developer who wrote the source code is the copyright owner. The rights that copyright grants them for that source code last for their lifetime plus 50 years, in most cases.

Copyright Ownership When Commissioning Work

However, the creator of a copyrighted work is not always the owner. Some circumstances change this ownership, including both commissioning and employment.

In particular, you commission someone when you give them instructions/directions for creating original work in exchange for a fee or other reward. As the commissioner, you then are the original owner of the copyrighted work itself in these situations. This rule does not necessarily apply to all copyrighted works, but it does apply to most software. Importantly, to be a valid commissioner, you need to offer a clear reward for the developer’s work.

For example, say that your business commissions a web developer to create a website for you. Without setting up other arrangements, the default legal position would be that you own the copyright to the source code of that website as the commissioner.

However, parties can set their own terms overriding this rule with an appropriately worded contract or agreement. As a result, most developers will have their own terms and conditions with clauses amending this rule to protect their intellectual property interests. Therefore, it is vital that you carefully read through any legal documents of this nature to determine who retains ownership of the source code. Notably, your agreement does not necessarily have to be in writing and can even be an informal conversation.

Creating Complex Works Online

Importantly, source code is not the only source of copyright when dealing with intellectual property online. Most software or websites will have whole teams working on them, with multiple contributors creating different kinds of original work. Therefore, if you are not clear about intellectual property ownership from the beginning, this can lead to disputes and misunderstandings down the line.

As a result, you should outline ownership and other similar matters in a suitable contract when engaging developers who will write the source code for your software or website. Ensure that you read any fine print, and clarify any issues before a developer creates the code to avoid timing disputes.

Key Takeaways

Source code qualifies as a literary work that copyright can protect, as a developer writes the code for either a computer or human to read. Notably, who the owner of that copyright will depend on the situation. As the author, the developer would usually be the owner, but if your business commissions them to make that source code, you may be the owner. However, a contract or agreement between you and the developer can amend this rule. Therefore, it is crucial that you clearly define who owns source code before development. If you would like more information or help with source code ownership, LegalVision’s data, privacy, and IT lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0800 005 570 or visit our membership page.

Frequently Asked Questions

What is source code?

In programming, source code refers to the text that a programmer writes that contains a computer’s commands. That computer then translates those commands and uses them to run a particular program.

Who owns source code?

Typically, the programmer that wrote the code will automatically own the copyright as the code’s author. However, someone else may own that code if someone has commissioned them to write it or if they create it for their job.

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