Almost every business now has a digital presence. Whether it’s a local baker or a multinational construction firm, the likelihood is that both of these companies will have a website. Recent figures suggest that there are around 1.2 billion websites on the internet, with nearly 200,000 new websites created every day.
While it can be relatively easy to set up a website today there is one critical question which many businesses overlook – do they actually then own it? The answer is some may not own the website, including the digital assets they contain.
Partner & Head of Commercial at Gardner Leader.
What it means to ‘own’ your website
‘Owning’ refers to the intellectual property rights – particularly, copyright – in the design and content of a website. Under UK legislation, the author of a piece of work, such as the coding for a website, will be the person who undertook and completed the project.
In many cases, unless a business is fortunate enough to have a digital designer on their staff, this will be an independent website developer. Simply commissioning and paying for the development will not be enough to mean a business actually gains ownership.
Unless the company secures a written assignment transferring ownership of the copyright in the website design to the business, these rights remain with the creator.
Avoiding copyright disputes
At the outset, it’s important to enter a written agreement with the developer confirming that the website design (and any content created) will be transferred to the business immediately on creation, within the fee structure.
The good news for those with in-house developers is that provided the work was created in the course of employment (and there is no contrary agreement), the work will belong to the employer.
However, businesses should still take care as with an increasing number of staff working from home, it may not be easy to prove that the work was created “in the course of employment”.
Businesses should ensure that contracts of employment are clear in the type of creations designers will be making during employment and that the employer owns these designs.
For employees with specific duties regarding creating copyright works, businesses may need to have separate IP agreements, effectively transferring any current and future copyright to the employer.
The risks
If a business commissions a website without securing a written assignment at the start, the impacts can be devastating, particularly if the business depends heavily on the website (such as an e-commerce business) or if the owners wish to sell.
While the company may be able to claim an implied license to use the website design and content, it’s likely they will need to take the developer to court to establish this.
Even then, the business will not own the copyright in the website design – the absence of which will be a major concern for a potential investor in or buyer of the business.
Also, a developer can refuse to assign the copyright or may seek to recover a large assignment fee. Either way, this will not be an attractive position for a business to be in, particularly if it is trying to demonstrate to a potential investor or buyer that it is a well-organized business with all legal issues addressed.
When thinking about the copyright in a website, it is also important to consider open-source software (OSS). This is often used by software developers as useful short cuts, but it can create problems.
This is mainly because the terms on which OSS is used generally provide that the code can only be licensed and not transferred, so that a business acquiring the rights to a website which incorporates OSS will not own the totality of the coding used to create it.
As well as the design, businesses need to consider the content of a website and who owns it. For example, designers may have used images from photo libraries (such as Getty Images), for which a paid for license will be required.
The designer may even have just taken images or text from the internet, where the copyright in those images and text may belong to a third party. This would run the risk of the threat of a copyright infringement action or at least, the payment of a license fee.
In summary, if businesses want to avoid having to ask that awkward question (do they really own their website?), they should:
- Enter a written agreement with their website developer, under which all copyright in the design is transferred to the business. This should be in respect of current and future copyright.
- Ensure that the developer company signs the agreement and any staff or contractors involved in the creation of the website design sign assignments of copyright.
- Review employment contracts for copyright clauses and consider separate agreements to ensure copyright is owned by the employer.
- Obtain the source code of the website design (and any updates), so that the business is capable of having the website maintained by a third party (in case the developer ceases to exist, for example).
- Check if the developer intends to use any OSS in the website design.
- Check the source of the images, text and other content of the website. Will the business own the copyright in these or will it need paid for licenses?
- Where possible, use its own employees to take the photographs and to create the text used in the website – subject to ensuring that the works are created in the course of employment.
Despite how damaging a lack of copyright ownership can be to businesses, from halting mergers or sales to incurring hefty assignment costs, the reality is that this can all be mitigated with presence of mind at the beginning of any professional relationship between the business, third-party developers or its staff.
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