NSW Who Owns Copyrighted Code within a Company?

[cyphix]

Just FYI....... I'm based in WA and the company is registered within NSW.

Just wondering, if I am involved within a Pty Ltd company and I have been the one that has written the code that runs our website and all it's features, do I personally still retain the copyright for that code?

...or does it depend on the company constitution?

Thanks!

 

[Tim W]

If a person is an employee*,
and that person writes code in the course of that employment,
then the default position is that the employer owns it.

If a person is a genuine contractor**, then the copyright in the code
starts with the code-cutter, but is usually assigned to the customer
as one of the terms of the contract for the work.



---------------------
* This includes either a temporary, fixed term, or casual employee, or a volunteer, or an intern
** That is, a separate entity that bills on a tax invoice, and who is not a sham contractor
*** Websites and underlying code are "literary works" in which copyeareight accrues

 

[cyphix]

What about the third option? If one was not an employee nor a contractor but just a shareholder partner in the company.

 

[Tim W]

The term "shareholder partner" has no meaning.
Companies and partnerships are different entities.
Which term applies?

 

[cyphix]

Sorry, it's a Pty Ltd company with 7 shareholders.

 

[Tim W]

Sorry, it's a Pty Ltd company with 7 shareholders.

To clarify - is the only payment you receive from the company a dividend?

 

[cyphix]

To clarify - is the only payment you receive from the company a dividend?

Nobody currently receives any money from the company as it is all reinvested back into the company at this stage.

 

[Tim W]

On that basis, I suggest that,
absent any express provisions about IP in the constitution, and
absent any other agreements about IP contributed by the shareholders,
then I would think it more likely that the copyright in the code, and the site,
would vest in the company.

 

[cyphix]

Ok thanks. I thought there would have to be a clause in the constitution or other to pass the copyright from the creator to the company?

 

[Tim W]

Ok thanks. I thought there would have to be a clause in the constitution or other to pass the copyright from the creator to the company?

Nah.

A shareholder contributing IP is not much different to a shareholder who contributes
money, or expertise, or shareholder-owned equipment, to the company.
These arrangements are usually dealt with in a Shareholders Agreement.

A Shareholders Agreement is the third document,
after the Constitution and the Replaceable Rules,
that should be created at start-up.
People often forget, or mistakenly decide that it is unnecessary.

In the absence of a Shareholders Agreement, or any other evidence,
it will typically be a question of intention.
In other words, if a person, say, writes code for a website,
or maybe designs a logo for a company in which they are
a shareholder (as distinct from employee),
then, absent anything to the contrary, the presumption will be
that the author intended copyright in that work to vest in the company.

Where this can become a thing is when a shareholders creates a company's website,
then has a falling out with the company, and tries to take down the website
based on a claim that they hold copyright in the code and/ or the design.
A person in that situation can often be mistaken about where the copyright vests.