|Radoslava Sláviková-Geržová||Jana Kudelčíková|
In this digital age, all businesses must make decisions about purchasing suitable, functional software, whether immediately on incorporation or later after they are up and running. Most businesses decide to either purchase off-the-shelf software or to order bespoke software. Due to the specific nature of software as a subject of intellectual property, licence agreements are frequently drafted incorrectly, leading to infringement of the author's rights and liability of the buyer for the infringement.
Due to its nature, software, or other designations used for computer programmes, as the subject of intellectual property, can have various forms of legal protection. While in the US, for example, it is protected as an invention, in Europe the laws lean more towards copyright protection. In Slovakia as well, a computer programme is considered to be a copyright work and it is protected under special provisions contained in the Copyright Act.
Under the Copyright Act, a computer programme benefits from two types of rights: moral and economic. These exclusive rights are held by the creator or creators of the software, typically programmers. Moral rights, such as the right to decide whether to publish the work, protection from unauthorised modification or other unauthorised tampering with the work, cannot be assigned by the creator of the work to another party, nor can they be waived. Moral rights cease to exist upon the death of the creator of the work. In contrast, economic rights such as adaptation rights, the right to make the work available to the public, and combining the work, may be exercised by persons other than the creator of the work. They can also be assigned.
As a copyright work, software is subject to strict copyright protection. In the event of any infringement of this right, the right-holder can seek effective recourse in a court of law. Consequently, it is strictly necessary for anyone interested in 'purchasing' software to have an agreement governing all rights and obligations, as well as liability for any breach.
It is somewhat more complicated when purchasing bespoke software according to specific, and usually unique, needs. In this case, the buyer and the programmer enter into a software development contract for work, which is considered a so-called mixed contract. The parties to the software development contract for work can set out all the details concerning the technical parameters of the software, as well as the price and delivery date.
Licence arrangements are an important part of the development of bespoke software. Licence arrangements are standard provisions in a contract for work; however, it is also possible for these to be the subject matter of a separate licence agreement. The buyer should make every effort to obtain the broadest licence possible, which should primarily authorise the buyer to install the software, make changes to the software and make it available to other persons. Licences that are granted are typically exclusive, cover all known uses of the software, and are for the duration of the economic rights to the software as a work. This means that pursuant to the licence, the buyer has exclusive and unrestricted rights to exercise the economic rights to the software. The moral rights still belong to the creator of the software. In practice, a non-exclusive licence can also be granted, meaning that the creator of the software is authorised to grant a licence to other persons in addition to the buyer. In this case, the scope of the granted licence must be specified in detail in the agreement.
The buyer can enter into a software development contract for work with a legal entity that employs a programmer, or directly with the programmer. Under the Slovak Copyright Act, if the development of software is one of the job duties of a programmer who is an employee, the employer exercises exclusive economic rights to the software, by operation of law. This is known as a work made for hire. If the buyer enters into a software development contract for work directly with a programmer as the author of the software, the buyer, just like the employer in the previous case, will directly exercise all economic rights to the software without the need to be granted a separate licence. It does then seem that entering into a contract directly with the author of the software is more convenient and a simpler option, although it is not always possible.
In reality, the more common situation is that the buyer enters into a software development contract for work with a legal entity that either employs a programmer or is under a contract with the programmer. In this case, a safe solution is to require proof that the legal entity, as the licence grantor, has a contract in place with the programmer, such as an employment contract. However, this is difficult to achieve in practice. This is why it is necessary to incorporate into the contract that the legal entity, as the contractor, is liable for all the proper contracts with the programmer, including the liability of the legal entity, as the contractor, for any infringements of the author's rights to the software. This protects the buyer if the programmer makes any claims against the buyer concerning infringement of his or her rights. Ultimately, the contractor will be liable for the infringement as the contractor made a representation in the contract that it was authorised to assign the rights to the software to the buyer.
Radoslava Sláviková-Geržová and Jana Kudelčíková