Intellect copyright and transferring a website

'Is it legal', 'can I do this' type questions and discussions.
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clivepreston
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Intellect copyright and transferring a website

Post by clivepreston » Thu Jan 13, 2011 9:27 pm

Hi

Fingers crossed someone can help me with this one.

I work for a local car dealership and part of my tasks is looking after the company website which we outsource to a web design company and have done for the last 4 years.

Unfortunately this web company went bust before Christmas and we have now been contacted by a new web company who have "acquired" all the sites from our previous supplier including ours.

This company is totally new to us and we have decided at this point to go with an alternate web design company who are known to us and have done other minor bits of work for us in the past.

We have asked this new supplier, who has acquired our website, if we can have the site, source code and database to allow our preferred supplier to host it on their server and to allow them to further develop the site for us.

They have provided this, but it's all compiled and encrypted. It means that our preferred supplier can host it only, but they can access neither the source code nor the front end design pages. So even if I wanted to make a change to my opening hours or fix a typo I can't.

I paid for this website in it's entirety including a custom car search and I also had a news updater created and also an updater for adding vacancies that we have. This was all written in ASP.Net and using an Access database.

The supplier who have our site, I have just found out, are made up of a few members of staff from the previous company and they have stated the following:

"Unless you have specifically ask us at the beginning of any project we develop, we would use our own internally developed source code which we have developed over a number of years for parts of your site."

"If anyone wishes to migrate away then we would only provide a compiled version. This keeps our costs down when developing websites for our clients."

"If you had requested that you wish to own the source code then we would have added this into the cost at the time of the proposal before any work was started."

That sort of statement has left me scratching my head a little. I was under no idea that there was a choice of having this type of code option when we asked them to build the site and if I had the choice I would have likely protected myself and the company by paying the little extra for the full source code allowing me total freedom to move it around should the relationship sour of they go bust.

I had no contract other that the proposal which detailed the work and I signed nothing with my old supplier.

Additionally, any agreement I had must be with the old supplier and surely any sort of intellectual property would not have transferred across to a new supplier who didn't do the work in the first place.

If anyone on here can provide me with a little bit of guidance it would be very much appreciated.

Thanks
Clive

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AndyJ
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Post by AndyJ » Thu Jan 13, 2011 11:47 pm

Clive,
As you are discovering this an immensely complicated area, and one that UK statute law is not that helpful on, for the simple reason that the 1988 Copyright Designs and Patents Act was written when the internet was in its infancy and the world wide web had still not been invented.
In simple terms code which makes up a website is generally treated as a "literary" work and therefore any copyright is automatically that of the author, not the commissioner, unless there was an agreement to the contrary, which it would appear in this case there was not.
Copyright is a property right which can be transferred much like any other property, so one company can acquire the physical and intellectual property of another company. Obviously I can't say if this happened in the case you mention, but it sounds from the fact that some of the employees of the previous company now work for the new web developer, de facto they possess the passwords, sourcecode etc which is tantamount to owning the copyright. However that applies to the code which makes the site run. There is a separate right, known as database right, which subsists in a database, and if you supplied that data to the original webdeveloper in its developed form (ie you compliled the database) then you are the owner of the database right. Equally you will own the copyright in any other written material which you supplied to the developer, for example any text describing the services your company provides etc.
So your website effectively consists of bits the web developer owns and bits which you own. The problem seems to lie in the fact that you want access to the bit - the code - which makes the site run, rather than the data which I assume you could re-create if necessary.
When you commissioned the site there was an implicit agreement that you would have a licence to use the site (and thus any copytright owned by the developer) without further payment, unless of course this was further development/site maintenance outside the scope of the original agreement. It would not be equitable for the developer to hold you to ransom when you exercise your right to move to another supplier, but equally he is entitled to some additional compensation if you wish to vary the implicit licence which applies to his copyright work. Clearly there needs to be some negotiation to reach a compromise.
I think you would be well advised to consult a soloicitor with IP experience on the best way forward. It may be that you will have to pay a nominal sum the buy out the copyright or extend the licence in the source code. But equally, it may be the case that the new developer is acting in an unfair manner in completely denying you the ability to transfer those parts of the site which are your intellectual property, because he has encrypted them, for which you could seek remedy through the courts. Neither of you will want this, hence some sort of dispute resolution through negotiation seems the best solution.

clivepreston
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Post by clivepreston » Sat Jan 15, 2011 11:02 am

Hi Andy

Thanks for taking the time to post such a detailed reply and yes there is certainly a lot to think about in there.

The relationship has certainly soured over this especially in the way the new supplier has conducted themselves so their actions are not intended for them to try and keep me as a client.

I must therefore deduce that it's purely down to money and they want some sort of compensation even though I paid quite a hefty sum initially to the previous supplier.

Feel I am being held to ransom a little, but will keep negotiating with them and will keep you informed.

Thanks again for the information.

Regards
Clive

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AndyJ
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Post by AndyJ » Sat Jan 15, 2011 3:23 pm

Clive,
There may be another argument you can take up with the web developers.
This concerns the contract you had with the original developers. This may have been written or verbal, but from what you have said, it sounds as if your understanding of that contract is different to what the new developers are now working to. Simply put, terms in a contract must be fair and reasonable, unless it is clear that both parties fully understood and agreed at the time to terms which a court might otherwise deem to be unfair.
If the new company are the legal heirs to the old developers then they are bound to stick to the original contract and any variance has to be by mutual agrreement. Obviously if the contract was verbal, you will have more difficullty in proving your version of events, but nonetheless it is a matter you can exploit. The difficulty comes if the new company is not legally the successor to the old company, in whch case they have no obligations in respect of the contract. But equally if that is the case they probably do not have any legal entitlement to benefit from the copyright of the old company either.
Of course it could be that the original contract required the old company to create and deliver a website, and that was it. In other words handing over the code was never discussed or envisaged, so that might be said to fall outside the contract. But I imagine there was some part which dealt with ongoing maintenance, so that might be worth looking into.
If you do not want to engage a solicitor maybe you can get some professional advice via a local small business association or trade body to which your company belongs. Unfortunately the CAB cannot help businesses.

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