Intellectual Property Rights or Who Owns the Source Code

When the decision is made and a company starts working on an IT project, there are a few important issues that need to be discussed in advance within the field of Intellectual Property Rights. As every invention or discovery, the design and the source code of a product are entitled to protection by law. Only the holder of the legal entitlements may exercise exclusive rights.

What happens with the source code once created?

Once a product is created, the software and its accompanying source code become either free or proprietary software. The free software does not need to be free of charge, but it means that it is free to use, distribute, modify and study. On the other hand, the proprietary one is privately owned and is not distributed freely, unless being licensed for it. It is important to understand the difference between open source and free software. When you get free software, you can freely use it, but you can never own it and make it proprietary even after modifications. In contrast, you can modify the open source software for the purpose of your project and start licensing third parties for it.

Which documents regulate the protection of Intellectual Property Rights within a contract?

Apart from the fact that all Intellectual Property Rights are protected by the local law, there are also two other documents that regulate the business relationship between the contractors – Non-disclosure agreement (NDA) and End-user license agreement (EULA). NDA is a legal document, which outlines the confidential information, knowledge, and process that the parties of the agreement wish to share with one another, but restrict access by third parties. This document can protect both sides of the agreement. If one of the contractors decides to distribute the created software under a license, once the project is finalized EULA is signed. It provides the purchaser with the right to use, modify, re-sale and backup the software. Some companies include support contracts for the product or warranty for a certain period.

Flat Rock’s practice

Once a project is finalized by Flat Rock, our Project Manager submits the whole information to the client, including a user manual. The usual warranty period of every product is 3 months. Within this period, Flat Rock takes care of the development issues, administration issues (if the website is hosted by us), bugs and anything that can prevent the optimal usage of the website.

After the project is ready, if the client decides, they can always obtain the source code and the editable files, which were used for the purpose of their project. The source code becomes a property of the client. However, the editable files needed for the creation of the bespoke design remain Flat Rock’s property. If the source code is received by the client during the warranty period, they need to sign an annex to the contract, which states that the warranty will be invalidated if there is an issue caused by the changes made by the client. In such cases the client will be charged additionally if they want to use Flat Rock’s service to fix the issue.

Flat Rock Technology is constantly putting efforts on improving our policy of keeping and protecting Intellectual Property Rights and try to serve our employees and clients fairly.

Written by: Flat Rock Technology Team on February 21, 2013

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