Are you a mobile app developer or someone contracting with a developer to make mobile apps? Are you having issues as to who owns what when the work is done, or even before it is done? You are not alone. This article aims to set out briefly some of the common copyright disputes that arise, what the law says, and what the process is for resolving these sorts of disputes.

Common disputes about mobile apps

Increasingly these days, we are seeing more and more mobile applications (apps) being developed for many different purposes. From tax lodgment to payroll, to apps for finding a lawyer or the best restaurant, the possibilities are endless. Businesses in all sectors are attempting to provide goods and services differently, and mobile app developers are helping them do it.

Sometimes, issues may arise between developers and their clients as to who owns the underlying data while the app is being developed. A dispute might arise when the project is complete, and the client may withhold payment. Developing an app can take months and even years and often agents are involved between the client and the app developer. Clients might change their mind and decide to take a half finished app to another developer to finish the project. Clients may assert that the app, and the intellectual property therein, is theirs, and may even withhold payment to their developer until the app, typically the source code underlying it, is given to them so that the app can be taken to another (less expensive) developer to finish. But really, who ‘owns’ it?

What the law says

The first place to look for answers to this question is the Copyright Act 1968. Under section 10, a “computer program” is included in the definition of a “literary work”. Under section 32, copyright of a literary work is effective if it was made in Australia by a suitably qualified author, even if it has not been published yet. Under section 35, the author owns the work. Lastly, section 196 tells us that ownership of copyright can be assigned (‘passed on’) to someone else, but an agreement to do so must be in writing.

Case law gives us some guidance as to what happens if you don’t have a written agreement or if the agreement is silent or vague as to the ownership. They tell us that if a business client asks for the app (usually in the form of its source code) to be given to them, a term will be implied to allow this to happen. This is particularly the case where the business client is paying for the design and manufacture of the app, and where, objectively, there is no real expectation that the developer should retain the app/its source code for itself or for the benefit of a competitor of the business client.

Arguments may also be made that the app developer only has a license to the app, which essentially means that the proper owner is the business client, not the developer.

Beyond Copyright

What about after the project has finished and the invoice has been paid in full? Can ideas, formulas and know-how which the app developer gained while working on its client’s app be used elsewhere? For example, the intangible ideas, formulas and know-how gained from a tax lodgment app – can you use these when working for another client looking to develop another finance or accounting app? Can the client come back and sue the app developer for IP infringement?

Resolving your dispute

Both the Supreme Court of NSW and the Federal Court of Australia can hear disputes concerning intellectual property. The starting point is your agreement. Without a written agreement, the dispute resolution process can be both complex and expensive.

The best advice before starting work on a mobile app is to agree in writing who will own what when the work is done, and at various stages of the work’s development.

Seek Legal Advice

Whether you’re a business or an app developer, if you have having issues around your app and its creation, we can provide additional information and advice to you regarding your situation. If you would like to discuss your concerns with a legal professional please contact us on (02) 9963 9800 or at law@etheringtons.com.au