Intellectual Property for Software: A guide to ownership and autonomy in the digital age

If you’ve chosen to go down the custom software development route, you’ll know all too well how much time and effort goes into creating a unique software product. 

From carefully mapping out your software architecture to designing your elements and testing; every stage of your software build demands meticulous attention. Therefore, it’s only natural that you’ll want to take control of your creation, keep your competitive edge, and prevent your product from falling into the wrong hands.

So, what is software IP? What rights does it cover? And, where do businesses stand when working with software agencies?

Use this helpful guide to find out.

What is Intellectual Property?

According to the official government website, Intellectual Property is used to describe something that “you create using your mind - for example, a story, an invention, an artistic work or a symbol”.

In their online guide to IP, they state that a product is owned by you if you:

• created it (and it meets the requirements for copyright, a patent or a design)
• bought intellectual property rights from the creator or a previous owner
• have a brand that could be a trade mark, for example, a well-known product name

IP can be owned by a group of people, an individual or a business and can be sold or transferred to others.

How does Intellectual Property for software protect you?

When it comes to software, your IP rights serve as a vital defence against the ever-present threat of imitation and unauthorised use. These exclusive rights enable you to control the distribution, reproduction, and adaptation of your creations, ensuring that the integrity and value of your software always remain intact.

What are the different types of IP?

IP covers a whole range of different rights that are designed to keep your assets safe under UK law. But, for Software Intellectual Property in particular, five main types of protection apply: 

• Patents: Patents grant exclusive rights for inventions, providing the inventor with the ability to prevent others from making, using, or selling the patented invention without permission.
• Copyright: Copyright safeguards original creations, giving the creator exclusive rights to reproduce, distribute, and display their work. This protection extends to the code, algorithms, and other creative elements of the software, ensuring that the creator has control over how it is used and distributed.
• Design: Design rights safeguard the visual appearance of products, including their shape, configuration, or ornamentation, ensuring that unique designs are protected from imitation or infringement.
• Trademarks: Trademarks protect brands, logos, and symbols that distinguish goods or services from others in the marketplace, allowing businesses to prevent unauthorised by competitors.
• Trade Secrets: Trade secrets are used to preserve confidential information that provides a competitive advantage, such as formulas, processes, or customer lists, ensuring that valuable business information remains confidential.

Who owns the Intellectual Property for software when working with a software company?

As we mentioned at the start, custom software development can be a lengthy but rewarding process. Whether you’re seeking a product for internal use or want something innovative to put on the market, custom builds give you the flexibility to tailor your software to the needs and goals of both your business and users.

But, if you’re not building your software in-house, you might be wondering who owns the IP.

Ownership of IP for software tends to vary depending on the specific terms of the contract or agreement between the software company and the client. This is something that you should always discuss with your chosen agency before commencing an outsourced software development project. 

To give you an idea of what you can expect, here are a few common scenarios:

• Work for Hire: Some agency contracts will stipulate that the client owns the IP rights to the software upon completion. This arrangement is often referred to as a "work for hire" agreement, where the client retains ownership of the IP created by the software company as part of the project.
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• Licensing: Alternatively, a contract may specify that the software company retains ownership of the IP rights to the software, but grants the client a license to use the software for its intended purpose. In this scenario, the client may have limited rights to modify, distribute, or sublicense the software, depending on the terms of the license agreement.
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• Joint Ownership: In other cases, particularly for collaborative projects or where the client actively contributes to the development process, ownership of the IP rights may be shared between the software company and the client. This arrangement, known as joint ownership, typically requires both parties to agree on how the IP will be managed and exploited.
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• Custom Arrangements: Lastly, depending on the specific needs and preferences of the client and the software company, custom arrangements may be negotiated. For example, the contract 
• may include provisions for royalty payments, revenue sharing, or exclusive rights to use the software in certain markets or industries.
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With any custom software project, it's essential for both parties to clearly define ownership rights and responsibilities in the contract or agreement before work begins. This helps avoid disputes and confusion down the line and ensures that both you and the software company clearly understand your rights and obligations.

Intellectual Property theft - how to take action 

Sadly, cases of Intellectual Property theft are on the rise and while no business likes to imagine having their assets stolen, it’s vital that you know what to do should you end up in this situation yourself. 

If you suspect that your business has fallen victim to IP theft, you should: 

Carefully assess the situation: Firstly, you’ll need to determine the exact nature and extent of the breach. Take time to identify which IP rights have been infringed and how the breach occurred.

Compile your evidence: Next, gather evidence to support your claims of IP infringement. This might include documentation of the original creation of the software, copies of relevant patents or copyrights, records of any licensing agreements, and evidence of the unauthorised use or distribution of the software.

Seek legal advice: Seek out advice from IP lawyers who specialise in software IP law. These lawyers will assess the situation, determine your next steps and provide guidance.

​​​​​​​Notify the infringer: Where appropriate, notify the individual or organisation responsible for the breach of your IP rights. This may involve sending a cease and desist letter demanding that they stop the infringing activities and take corrective action to remedy the breach.

​​​​​​​Consider legal action: Depending on the severity of the breach and the willingness of the infringer to cooperate, you may need to pursue legal action to enforce your IP rights. This can include filing a lawsuit for copyright infringement, patent infringement, trademark infringement, or trade secret misappropriation.

​​​​​​​Explore remedies​​​​​​​: In cases of IP infringement, remedies may include injunctive relief (to stop the infringing activities), monetary damages (to compensate for lost profits or other harm), and lawyer's fees (to cover the costs of legal representation).

​​​​​​​Review and strengthen security measures: After addressing the breach, focus on reviewing and strengthening your security measures to prevent future IP breaches. Consider implementing stricter access controls, encryption measures, or monitoring systems to detect and prevent unauthorised use or distribution of software.

Fortunately, having a solid understanding of IP rights empowers you to proactively protect yourself and respond effectively in the event of a worst-case scenario. With the right knowledge, you’ll be in a much better position to preserve your IP assets and mitigate the potential impact of theft or infringement.

Take ownership of your software IP when working with us 

Our Newicon team are committed to ensuring that your rights are protected.

When we design and develop custom software solutions, we transfer IP rights over to you, so that you own your product and have the freedom to use it however you wish. 

In niche cases, we may need to reuse a small element of your design or adapt a feature for future software builds. If this is the case, we’ll always be transparent about this right from the start – before any work has been agreed and before contracts have been signed. 

If you’d like to find out more about our approach to IP, please take a look through our company terms and conditions.  

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