Logic Sold Separately - Legal Issues for Developers

It's Never Too Late...

What if you already signed away a “Website” in a contract that doesn’t properly draw this distinction, and your customer makes a claim to the software you wrote to run behind the site? In this case, I believe you face the more expensive and challenging tasks of proving (to a non-technical judge or jury) that the distinction between the enabling software, and the rest of the Website:

1. cuts to the heart of whether there really was an agreement at all (the proverbial “meeting of the minds”), and

2. merits great weight in deciding the outcome under the specific facts of your case (since there is no contractual definition).

Programming 101 for Judges and Juries

How do you persuade a lay judge or jury how this distinction had to have underpinned the whole deal? I would argue that visual elements are basically one-shot deals. When a developer designs a logo for a customer, it must extract the full value or price from that customer - because it can never leverage (i.e., re-use) that logo for another customer. Similarly, HTML code cannot truly be leveraged.

Not so for true logical elements, whether script or programming language. Typically, efficient and sophisticated developers work harder and smarter to develop modular code that they can widely re-use, and repeatedly extract value from.

Therefore, parting with the copyright to code will, in effect, “cost” the developer time and time again. Tech-savvy common sense, fairness and business dynamics all compel the developer to give up code ownership only knowingly, and for an appropriate price.

Website Architecture for the Server Rack - and the Courtroom

How do you persuasively distinguish software from a Website for a judge or jury? Your software should be as different and as separate from the rest of the Website as possible. Ideally, your software should exist in wholly separate files (DLLs, EXEs or the like) and reside on a separate server from that which hosts the site. The beauty of that architecture is that it’s equally desirable from both legal and technical standpoints.

Conclusion

Based on Web-related contracts in wide circulation, the distinction between a Website and site-powering software is an obscure one. But, in the right circumstances -- if skillfully drawn, either in court or in contract – that distinction just might make the difference between profits and losses.

What happened with the client of my colleague, discussed at the beginning of this article? It decided to negotiate to avoid the uncertainty of the outcome of anticipated litigation. You see, that developer-host had a couple of strikes against it.

First, its off-the-cuff contract made no attempt to draw any distinction at all between the Website and the powering software. On the contrary, by its own reckless terms, the developer-host transferred to its customer intellectual property rights to "all property developed".

Second, that developer-host made no attempt technically to separate the Web user interface from the considerable amount of logic that powered the Website. Instead, it embedded all the logic in server-side scripts that resided entirely within the rendering Web pages. Sure, you and I know that it's still software, but try explaining that to a non-technical judge and jury.

Any way you cut it, it just makes plain good sense to separate your Web user interface from your logic -- both legally, preferably in a clear and thorough contract, and technically, in implementation architecture.

NOTE: The preceding article contains general information only. It does not contain legal advice. For legal advice, you should consult an attorney about your specific situation.