Greetings all, I and trying to figure out how to handle a copyright issue and have difficulties finding references to anything similar. The question is as follows.
My company owns a piece of software in a country where we operate. The client is adamant that the software reside in that country, basically to ensure that national law applies to the software.
Now another country would like to buy the software. They too are adamant that the software abide by their national law, and have thus stated that the software must reside in their country.
The other country intends to have the company local operation perform modifications to the software, so that it will diverge from the software variant (or version) that stays in the original country.
So, my basic approach would be as follows - Make a copy of the software and give the copy a new identity and status as a separate work of its own. We are the owners, so we wouldn't sue ourselves for infringement...
Then make sure that the original country/client has no issues with selling the other copy to the other country - they shouldn't because they care of their own rights rather than preventing someone else from using it. Then make sure that the new country understands that there is a similar (identical) work remaining in the original country - they shouldn't mind either as they really don't care to limit the use but only to ensure that they can do what they want with it (i.e. that their national law applies to it).
However, it sort of feels wrong to create "Work 2" by merely copying "Work 1" even though no-one's rights are violated.
Is this doable? If not, is there another way?? Any help would be appreciated.
Replicating a software work to make it reside in two places?
Hi dawe,
Wow this sounds mighty complicated. I am assuming that at least one of the two countries is located outside the EU, because member states within the EU have harmonised their copyright laws on the treatment of software in line with the Software Directive 2009/24/EC.
It needs to be stressed that copyright protection only extends to the expression of the software (usually, but not exclusively, in its coded form and any preliminary documentation), but not the underlying ideas or principles of it. To this extent algorithms, programming languages and various types of software interfaces or APIs are not protectable. The function or consequence of the software is also not protected by copyright, although it may be by patents. The output (data) may well be protected either under the database right, or as a new literary, musical, or artistic work, provided that there is at least some human creativity involved in the interaction with the software (think of a word processing program, or Photoshop for instance).
So having said all that, I am not clear what it is that you and the potential customer (Company B) are seeking to use your respective domestic laws to protect against. Is it straight forward copying by some third party, in which case physical security stands a better chance of achieving this, ie not running the software on a machine or network which has external ports, and keeping the master discs and any backups of the software under lock and key. If it is to protect the ideas or purpose underlying the code, then this would be better done through patent law as a business process, because once the general purpose becomes known outside of you respective companies, in theory anyone can write their own code to replicate the functioning of your software without infringing the copyright in it. Indeed the law even allows a certain amount of decompilation of your software by a third party who has legally acquired it, in order to study its functioning etc. This would include Company B to whom you wish to sell a version of your program (Work 2).
But turning to your specific questions, your company as the legal owner of the copyright in Work 1 may make an adaptation of it (ie Work 2), and if there has been sufficient additional creative effort applied to the making of Work 2 then it will attract a separate copyright, the duration of which will commence at the time Work 2 is made*. To take another example, this means that Windows XP v1.0 has a different copyright to Windows XP SP3, although I would hate to get into an argument about whether a patch or bug fix will always amount to a 'new' work being created.
So on that basis, Work 1 and Work 2 could co-exist. Copyright in Work 2 would still lie with your company but of course you may either assign the copyright to Company B so that henceforward they would own the copyright in their version, or you may license them to use the software, either in perpetuity or for a fixed period, and you could also make other stipulations such whether they can issues sub-licences etc. There are various things which you cannot prevent by contract or licence, including the matter of decompilation mentioned above. However if you only licence Company B to operate your software, then you will need to give them additional authority to modify it in any substantial way, because the right to authorise adaptation remains with the copyright owner. The extent to which the Company B would own any new copyright in software which they had altered with your permission, would depend on how original their contribution was in creative terms. They would only own copyright in the amended part, while your company would retain the copyright in the un-amended part, if this was done under licence. Because this can get quite complicated as there may also be other local legal aspects to reflect in a licence, or indeed an assignment, you should get a suitably qualified lawyer to draw up the contract.
I am also unclear about why Company B is so insistent about where the software 'resides'. All countries which have signed up to the Berne Convention have agreed to treat software (or computer programs) as literary works for the purposes of copyright protection, and they are obliged to provide 'foreign' works no less protection than they accord to domestically produced works. So say Company B was based in the USA and your company is in Sweden, your software (work 2) will be entitled to much the same level of protection when it is operated on a server in the USA as it would get when running on a machine in Sweden. The issue really lies with who has the ability to enforce the copyright. If Company B in the US merely has a license to operate your software, and you retain the copyright, only your company is likely to have the standing to sue a third party who has infringed the copyright in Work 2, even though the infringement happened in the USA and only Company B stood to be damaged by the infringement. Because of this complexity, and the fact that I may have misunderstood exactly what you are trying to achieve here, you would be well advised to consult a local lawyer who specialises in IP matters.
* Although the new copyright in Work 2 will commence when the adaptation is completed, the duration of copyright will be based on the lifetime of its author(s) plus 70 years. Assuming the same authors (programmers) are responsible for both Work 1 and Work 2, copyright in the works will end at the same time.
Wow this sounds mighty complicated. I am assuming that at least one of the two countries is located outside the EU, because member states within the EU have harmonised their copyright laws on the treatment of software in line with the Software Directive 2009/24/EC.
It needs to be stressed that copyright protection only extends to the expression of the software (usually, but not exclusively, in its coded form and any preliminary documentation), but not the underlying ideas or principles of it. To this extent algorithms, programming languages and various types of software interfaces or APIs are not protectable. The function or consequence of the software is also not protected by copyright, although it may be by patents. The output (data) may well be protected either under the database right, or as a new literary, musical, or artistic work, provided that there is at least some human creativity involved in the interaction with the software (think of a word processing program, or Photoshop for instance).
So having said all that, I am not clear what it is that you and the potential customer (Company B) are seeking to use your respective domestic laws to protect against. Is it straight forward copying by some third party, in which case physical security stands a better chance of achieving this, ie not running the software on a machine or network which has external ports, and keeping the master discs and any backups of the software under lock and key. If it is to protect the ideas or purpose underlying the code, then this would be better done through patent law as a business process, because once the general purpose becomes known outside of you respective companies, in theory anyone can write their own code to replicate the functioning of your software without infringing the copyright in it. Indeed the law even allows a certain amount of decompilation of your software by a third party who has legally acquired it, in order to study its functioning etc. This would include Company B to whom you wish to sell a version of your program (Work 2).
But turning to your specific questions, your company as the legal owner of the copyright in Work 1 may make an adaptation of it (ie Work 2), and if there has been sufficient additional creative effort applied to the making of Work 2 then it will attract a separate copyright, the duration of which will commence at the time Work 2 is made*. To take another example, this means that Windows XP v1.0 has a different copyright to Windows XP SP3, although I would hate to get into an argument about whether a patch or bug fix will always amount to a 'new' work being created.
So on that basis, Work 1 and Work 2 could co-exist. Copyright in Work 2 would still lie with your company but of course you may either assign the copyright to Company B so that henceforward they would own the copyright in their version, or you may license them to use the software, either in perpetuity or for a fixed period, and you could also make other stipulations such whether they can issues sub-licences etc. There are various things which you cannot prevent by contract or licence, including the matter of decompilation mentioned above. However if you only licence Company B to operate your software, then you will need to give them additional authority to modify it in any substantial way, because the right to authorise adaptation remains with the copyright owner. The extent to which the Company B would own any new copyright in software which they had altered with your permission, would depend on how original their contribution was in creative terms. They would only own copyright in the amended part, while your company would retain the copyright in the un-amended part, if this was done under licence. Because this can get quite complicated as there may also be other local legal aspects to reflect in a licence, or indeed an assignment, you should get a suitably qualified lawyer to draw up the contract.
I am also unclear about why Company B is so insistent about where the software 'resides'. All countries which have signed up to the Berne Convention have agreed to treat software (or computer programs) as literary works for the purposes of copyright protection, and they are obliged to provide 'foreign' works no less protection than they accord to domestically produced works. So say Company B was based in the USA and your company is in Sweden, your software (work 2) will be entitled to much the same level of protection when it is operated on a server in the USA as it would get when running on a machine in Sweden. The issue really lies with who has the ability to enforce the copyright. If Company B in the US merely has a license to operate your software, and you retain the copyright, only your company is likely to have the standing to sue a third party who has infringed the copyright in Work 2, even though the infringement happened in the USA and only Company B stood to be damaged by the infringement. Because of this complexity, and the fact that I may have misunderstood exactly what you are trying to achieve here, you would be well advised to consult a local lawyer who specialises in IP matters.
* Although the new copyright in Work 2 will commence when the adaptation is completed, the duration of copyright will be based on the lifetime of its author(s) plus 70 years. Assuming the same authors (programmers) are responsible for both Work 1 and Work 2, copyright in the works will end at the same time.
Last edited by AndyJ on Thu Feb 12, 2015 4:26 pm, edited 2 times in total.
Advice or comment provided here is not and does not purport to be legal advice as defined by s.12 of Legal Services Act 2007
Thanks for the reply. I understand I might need to be a bit more specific. I'll take my two neighbors Finland and Norway as examples.
Let's say I work for MyCompany AB (AB is "Ltd" in Swedish"). Currently Work1 is (c) MyCompany OY (OY is "Ltd" in Finnish). The other country could be Norway, and the Kingdom of Norway would require the software to reside in Norway, e.g. with MyCompany AS (AS is "Ltd" in Norwegian).
The reason Finland wants it to reside in Finland (with MyCompany OY) is that they want Finnish export control legislation to apply. The Finnish Gov't would like their license to enable them to provide the software to a partner without asking any other country. Finland's license rights to use would of course cater for this.
The reason the Norway would want the software to reside in Norway is also export control. They would not like to be constrained by Finland Gov't in what countries they pass the software on to due to Export Control.
However, Finland does not mind Norway using the software, and neither does Norway mind Finland.
And yes, if we just took the ideas and wrote Work2 to do the same thing but with another expression, the Work2 software would be a separate work. However, that's expensive, and thus we'd all prefer to avoid it.
Did that clarify the question?
Let's say I work for MyCompany AB (AB is "Ltd" in Swedish"). Currently Work1 is (c) MyCompany OY (OY is "Ltd" in Finnish). The other country could be Norway, and the Kingdom of Norway would require the software to reside in Norway, e.g. with MyCompany AS (AS is "Ltd" in Norwegian).
The reason Finland wants it to reside in Finland (with MyCompany OY) is that they want Finnish export control legislation to apply. The Finnish Gov't would like their license to enable them to provide the software to a partner without asking any other country. Finland's license rights to use would of course cater for this.
The reason the Norway would want the software to reside in Norway is also export control. They would not like to be constrained by Finland Gov't in what countries they pass the software on to due to Export Control.
However, Finland does not mind Norway using the software, and neither does Norway mind Finland.
And yes, if we just took the ideas and wrote Work2 to do the same thing but with another expression, the Work2 software would be a separate work. However, that's expensive, and thus we'd all prefer to avoid it.
Did that clarify the question?
/dawe
Hi dawe,
Thanks for the additional information. If the countries you have quoted in your example are the actual countries involved, since they have signed up to the European Economic Area treaty (technically Norway is a participant, not a member, but the effect is the same), they are bound to follow EU Directives a certain topics, which includes copyright. Thus the Software Directive applies to Sweden and Finland (as EU member states) and Norway as an EEA participant.
However, that doesn't really help with your specific problem. It is a basic tenet of copyright law that the place where the work is made determines a number of things, as does, on occasion, the nationality of the author. So any software which you create in Sweden will start out with the protection afforded under Swedish law. If you sell your software to MyCompany OY then Finnish copyright law will continue virtually all of the protection the software had when it was in Sweden, but it will recognise it as a 'foreign' work. A good example of how this distinction works in practice can be seen with US Copyright law. If a US author wishes to sue in the US Federal courts for copyright infringement, he first needs to register his work with the US Copyright Office. However if a Swedish author wishes to sue an infringer in the US courts, he is not required to register his work first, and would still be entitled to the same level of statutory damages as would a US citizen.
I suspect that the stipulations surrounding export control would demand that the product was created in the destination country (possibly by persons who are citizens of that country or habitually resident there), rather than country of origin of the product. However that is way outside copyright law and indeed my area of knowledge.
Because you have mentioned national governments getting involved here, I really think you need to consult a lawyer with IP and commercial experience to advise you on the best way forward. The issue you need to get resolved is where the software has to be created in order to qualify under the various national export control regimes. I suspect the copyright aspect is either secondary or irrelevant to that.
Thanks for the additional information. If the countries you have quoted in your example are the actual countries involved, since they have signed up to the European Economic Area treaty (technically Norway is a participant, not a member, but the effect is the same), they are bound to follow EU Directives a certain topics, which includes copyright. Thus the Software Directive applies to Sweden and Finland (as EU member states) and Norway as an EEA participant.
However, that doesn't really help with your specific problem. It is a basic tenet of copyright law that the place where the work is made determines a number of things, as does, on occasion, the nationality of the author. So any software which you create in Sweden will start out with the protection afforded under Swedish law. If you sell your software to MyCompany OY then Finnish copyright law will continue virtually all of the protection the software had when it was in Sweden, but it will recognise it as a 'foreign' work. A good example of how this distinction works in practice can be seen with US Copyright law. If a US author wishes to sue in the US Federal courts for copyright infringement, he first needs to register his work with the US Copyright Office. However if a Swedish author wishes to sue an infringer in the US courts, he is not required to register his work first, and would still be entitled to the same level of statutory damages as would a US citizen.
I suspect that the stipulations surrounding export control would demand that the product was created in the destination country (possibly by persons who are citizens of that country or habitually resident there), rather than country of origin of the product. However that is way outside copyright law and indeed my area of knowledge.
Because you have mentioned national governments getting involved here, I really think you need to consult a lawyer with IP and commercial experience to advise you on the best way forward. The issue you need to get resolved is where the software has to be created in order to qualify under the various national export control regimes. I suspect the copyright aspect is either secondary or irrelevant to that.
Advice or comment provided here is not and does not purport to be legal advice as defined by s.12 of Legal Services Act 2007
Well, the issue isn't really "traditional copyright protection", but rather connected to the issue of export control and the "nationality of residence" of a software.
On an other occasion, MyCompany AB (Sweden) acquired the copyright to another software from MyCompany OY (Finland), and the Finnish export control authorities "hand over" export control authority of the item to the Swedish export control upon a formal request/application from MyCompany. So then the Finnish MyCompany OY and the Finnish Gov't is restricted from export without the permit of Sweden. That's the trick - how have the software reside in two countries so that neither has its export control conditional upon the other.
And thanks for your effort - much appreciated.
On an other occasion, MyCompany AB (Sweden) acquired the copyright to another software from MyCompany OY (Finland), and the Finnish export control authorities "hand over" export control authority of the item to the Swedish export control upon a formal request/application from MyCompany. So then the Finnish MyCompany OY and the Finnish Gov't is restricted from export without the permit of Sweden. That's the trick - how have the software reside in two countries so that neither has its export control conditional upon the other.
And thanks for your effort - much appreciated.
/dawe
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CopyrightAid
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I agree with Andy here - I can't see that copyright is any part of this issue - As I understand it you are the copyright owner and you are licensing your software product to these two companies. What they have to do to comply with their own national import/export laws is surely down to them.
As Andy says, you probably need to get a commercial IP lawyer to look at this and draw up a licensing agreement that all parties will respect. At the moment it sounds like the 'countries' are just messing you around.
If, on the other hand, you have already agreed to and signed a restrictive licence with one country that means that you can't licence your software to another country in the manner they want, I think you will just have to live with that, accept the situation and move on.
Frankly, this sounds like you are inventing a concept to try and hide the reality from the respective companies. However you try to dress it up, a copy of 'work A' is still a copy of 'work A' even if you call it 'work B'.So, my basic approach would be as follows - Make a copy of the software and give the copy a new identity and status as a separate work of its own
As Andy says, you probably need to get a commercial IP lawyer to look at this and draw up a licensing agreement that all parties will respect. At the moment it sounds like the 'countries' are just messing you around.
If you provide your software to each company under a non-exclusive licence that allows them to do this why should they ever be 'asking any other country'?, I see no reason why that should be a condition of the licence.The reason Finland wants it to reside in Finland (with MyCompany OY) is that they want Finnish export control legislation to apply. The Finnish Gov't would like their license to enable them to provide the software to a partner without asking any other country. Finland's license rights to use would of course cater for this.
The reason the Norway would want the software to reside in Norway is also export control. They would not like to be constrained by Finland Gov't in what countries they pass the software on to due to Export Control.
If, on the other hand, you have already agreed to and signed a restrictive licence with one country that means that you can't licence your software to another country in the manner they want, I think you will just have to live with that, accept the situation and move on.