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Thread: Safeguards for preventing code theft

  1. #1
    Join Date
    Feb 2005
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    Safeguards for preventing code theft

    Hi everyone .. new to the forum. Glad to find this resource!

    Can anyone offer help in the area of preventing code theft?

    We had a contractor create a custom-built, web-based software that registers users for our athletic events, and keeps a points tally on their racing results.

    Our big goal this year is to resurface our website and part of that involves tapping into the current database and system. The contractor who built it is not capable of doing this for us, so we've started working with a web development firm to help us create a new site, active publishing system and a whole slew of stuff.

    They have asked for copies of the database and code, so they can figure out what's not working with this custom system (we've had some serious issues with it and the contractor) and where they can farm data to create rich content for site visitors.

    What's to prevent them from stealing this code? Is there something we should have them sign before we hand over the files?

    (BTW - I'm a complete NEWBIE to all of this. Previously the editor of the website, so I'm in over my head : )

    Personally, I trust that they will not steal the code and I can't see any instance where this stuff would apply to another business. But I just want to make sure we're protecting our investment.

  2. #2
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    Personally, I would not worry about the third-party company stealing the source code.

    The software should be copyrighted. However, if it makes you feel more comfortable, there is nothing to say you cant whip up a quick contact stating the code belongs to your company and cannot be used without permission.

    Here is some sample contracts that you can model from:
    - http://www.theaca.net.au/docs/Superv...e_Contract.pdf
    - http://www.mapnp.org/library/misc/smplcntr.htm

    Regards,
    Andrew Buntine.

  3. #3
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    Safeguards for preventing code theft

    Great, thanks for the help.

    The software development has been out of my hands up to now. How do I know that the software has been copyrighted to us?

  4. #4
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    Generally, copyrights are immediate. If you've done something original, then it belongs to you. Im not sure whether the same applies in your country. The source code should be marked with a copyright sign, such as:
    The following source code is copyrighted Your Company 2002 (c). It may not be used without written permission from the owner.
    You can add a copyright notice at the top of each file if you wish.

    Regards,
    Andrew Buntine.

  5. #5
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    Safeguards for preventing code theft

    Andrew,

    The code was written by a contracted programmer we hired.

    No one at our company has actually seen the code, so for all we know he put his own stamp on the copyright.

    We are likely no longer going to work with this programmer after this year, so we need to make sure the third party can work with it if necessary without running into problems with the programmer claiming the third party stole the code.

    I now have the files, so I'll dig through and try to locate some kind of copyright statement.

    Wish me luck and thanks again for your help.

    Cheers!

  6. #6
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    Throwing a copywrite symbol does nothing for you legally unless you have registered the software or code with the proper authorities.

  7. #7
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    A couple of points (this is the normal situation, but different countries might have different laws):

    1. By default, unless copyright is assigned to someone else it belongs to the person who created the work. In your case, unless you agreed otherwise with this programmer he may still own the copyright (though there may have been an implied or verbal agreement even if nothing was written down).

    2. You do _not_ need to register copyright with anyone for it to be protected. Under the Berne convention, which most countries follow for copyright law, copyright applies immediately a work is created (as Andrew said) though legal action might well be easier if you have evidence you created the work first.

    Adam

  8. #8
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    Safeguards for preventing code theft

    I'm a bit confused now.

    But my main concern is that we've spent a ton of money to build this software, but we can't do anything with it unless we go through the programmer who wrote it, cuz he owns the copyright by default?

    The president of our company handled the contract and business relationship with this programmer, so I have no idea what agreements they made in writing or otherwise.

    So are we being held hostage by this programmer, unless we have the software copyrighted to our company?

  9. #9
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    Pretty much if you did not have a contract signed by the original software programmer, than he is legally entitled as the owner. Same counts with any future projects.

    Small business with that have a good start of budget start their business off by buying a lawyer and an accountant.

    Contracts are key. Well written contracts that is.

  10. #10
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    By my understanding and experience, copright is often handed over when the software has been paid for in full. If not, it should be stated in the contract that the software will belong to the original author.

    Also, cant you get in contact with the original developer and simply ask him about the copyright? He may be able to forward you written permission.

    Regards.

  11. #11
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    I am no expert but I think there is an extra dimension to this; all replies thus far have assumed that the contractor was building the software on his own time and then selling it to you, in which case all the above applies and you are in severe difficulty if the contract is not specific about IPR.

    However my understanding was that an employee of a company who creates something during work hours on company premises using company resources does not get those same rights, rather the rights reside with the company that was employing them at that time.

    Where a conractor fits in I am not sure, but it may depend if they operated as a regular employee of your company (albeit on a fixed term contract) or whether they operated as a freelancer (e.g. on their own premises, using their own resources, taking the risk - e.g. paid in full at end of project).

    As far as the new relationship goes I use a standard contract that identifies not only who has IPR on work prodced as part of the contract but also identifies that any IPR that predates the contract remains with the owner, so any code, data etc. you provide to them in order for them to fulfill the contract remains your IPR. Whether it is yours in the first place can be resolved as a seperate issue, you still need to claim your rights on the new contract, in fact all the more so since you may thereby be protecting the rights of the contratcor and thereby fulfilling any legal obligation you may have to them.

  12. #12
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    The copywrite laws that are mentioned above are in force in nearly every nation, but as I said you will not have much legal ground on which to stand unless you register it with the proper authorities. Yes you theoretically hold the copywrite if you created something but if someone steals it you will probably spend more time and money than something is worth proving that it is in fact yours.

    As far as DaiWelsh's post goes, I know for a fact that here in the USA this is true. I know this from personal experience. If you are working for somebody and you create something it is ultimately theirs. This applies to employees, & sub-contractors (freelancers) alike. If you sell them whatever it is you create though and you have copywrited it then whatever it is, it is still yours. You could even charge them royalty fees for using your copywrited material.

    Anyway all this is well and good but the best person to ask would be a lawyer. A good one will know all the legalities involved.

  13. #13
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    Safeguards for preventing code theft

    Thanks everyone. I'll have to look at the contract to know where we stand on this issue.

    The last thing we need is a legal battle.

  14. #14
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    US intellectual property laws are actually pretty straightforward. Unless stated to the contrary by you when contracting for the work, if the work was paid for by you it belongs to and is copyrighted in behalf of you. You do not have to register the copyright to be protected, but the copyright needs to be stated within the work to provide absolute protection. That statement does not need to be public or visible. You do need to register the copyright in order to file suit pursuant to a copyright infringement, but you can make that registration after the fact if the copyright is stated within the work.

    To repeat, though, "work for hire" (that is, work that is performed in your behalf and is paid for by you) belongs to you. Even if the writer states to the contrary it won't hold up in a contest.

  15. #15
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    Just to confuse matters (well actually because I am not sure what country the original poster or future readers are in) this is absolutely not the case in the UK.

    Paying for a piece of work to be done on your behalf by a supplier (either company or individual provided they are not an employee) does not automatically give you IP on it. This is frequently expected to be the case which is widely abused by less reputable developers. You might be able to obtain rights over the work but you would have to go through the courts and make a case for why you should own it (beyond the fact that you paid for it).

    All contracts involving IP in the UK need to explicitly state IP assignment, particularly with regard to the 'customer' in the relationship who is otherwise in a very weak legal position for anything beyond using the code as provided for the explicit purpose stated in the contract. Any modification, re-use, extension, re-sale etc. would then need consent from the creator which they can reasonably withhold or demand payment for.

    A simple IP assignment is not hard to add to a contract, so just do it already

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