We buy a computer program for our company

The majority of entrepreneurs, nowadays, care about technological development and improvement of internal operations of their companies. The world is moving towards total computerization, and we, as entrepreneurs, must follow this trend in order to keep up with it and not to fall out of the so-called circulation. Therefore, as an entrepreneur, we purchase computer programs and applications in order to improve our machines and the activities of our employees.

How to formulate a contract with a programmer to create a computer program or application for our company?

There is no major problem when we buy software from a shop, which is commonly available. Such programs are usually based on a license, which defines the fields of exploitation, i.e. copyrights and the scope of their use by the buyer.

A problem with understanding the mechanisms of creating a program arises for us when we order an individual, unique computer program or application that is to be created especially for our company by a programmer. And here we have two aspects of the matter. It is not a problem when a computer scientist or programmer is employed by us within the framework of an employment relationship, and the program he creates for our company is included in his scope of duties.

Dilemmas appear when we sign a civil law contract with a programmer for the creation of the above mentioned software.

In order to understand the problem and deal with it, we have to go back to the very origin of the computer program, i.e. how it is built and who has the right to the created work.

At the base of a computer program we are dealing with the source code. And here, for an ordinary bread eater, who does not deal with the subject of programming on a daily basis, an intensive chase of thoughts begins. Younger generations probably know better than today’s 30- and 40-year-olds. So what is this source code?

Source code is a mathematical algorithm, characteristic, individual and unique. It is such a mathematical record, only quite complicated, written in alphanumeric form, consisting of a sequence of numbers, digits, characters and symbols.

A computer program is protected by law, it is a kind of work within the meaning of copyright and related rights regulations. According to Article 74 of the aforementioned Act, the protection granted to a computer program covers all forms of its expression.

The scope covered by copyright is the creative elements in a computer program, i.e. the source code appearing as a set of instructions of a specific kind. Apart from copyright protection, there remain the rules of building a computer program, i.e. the rules of building the source code, as well as the rules of using the programming language.

It is important for us, from the buyer’s point of view, whether a computer program is created by a programmer with the use of scripts and ready-made applications, or even entire fragments of the source code. Then we have to check what use of the above mentioned tools is allowed by their license.

This is an extremely important aspect, and often concealed from the client by programmers. It may turn out that the license used was “open source”, i.e. the so-called free license, and the condition to use it is a limited scope of copyleft type, i.e. you can use it only in order to create a program that will be made available to others free of charge, and therefore it will also have a so-called free license.

This information is important to us as entrepreneurs in terms of the transfer of economic copyrights to the program.

Let us remember, therefore, to stipulate in the civil law agreement with a programmer the issues concerning the tools that he intends to use to create a work for us in the form of a computer program.

It is also worth noting that not all computer programmes are subject to copyright protection. Programs which have been created to operate and compile databases accessible by electronic means are not subject to legal protection of copyright, due to the lack of creative features – in this respect, our agreement will not concern the legal protection of the programmer’s copyright.

So how to formulate a contract with a programmer to create this programme?

The contract that we create should be a work contract, because we expect a one-off effect of work – i.e. the creation of a computer program or application for our company. The contract of mandate would apply if we did not expect a specific result, but a series of activities, e.g. the creation of a computer program or application.

The contract would apply if we did not expect a specific result, but rather a series of actions, e.g. monthly monitoring of the condition of our computers and their possible repair. Let’s remember to precisely define the scope of work – the legal form of the contract that we conclude with the programmer depends on it. It is important that the technical specification defining the scope of work becomes an annex to our agreement.

In each contract for the execution of a computer program it is absolutely necessary to specify the scope of use of economic copyrights.

In accordance with Article 74 of the aforementioned Act, copyrights to a computer program include:

  • its permanent or temporary reproduction in whole or in part by any means and in any form; to the extent that in order to introduce the display, use, transmission and storage of a computer program it is necessary to reproduce it, these activities require an authorized person,
  • translation, adaptation, alteration of the layout or any other changes in the computer program, while preserving the rights of the person who made these changes,
  • the distribution, including lending or rental, of a computer program or a copy thereof.

If the computer program/application is to become our full property, it is advisable to demand the transfer of all copyrights to the above mentioned work. If we are to use only to a certain extent the economic copyrights, let’s determine the license and the fields of exploitation, which we will be able to use after its purchase.

It should be remembered that our scope will include only property rights, personal copyrights are inalienable and will always belong to its creator. What does this mean? The creator of a computer program has the right to the authorship of this program, including the right to mark the program with his own name or trademark.

There is still one more aspect concerning economic copyrights. According to Article 75(2) of the Act on Copyright and Related Rights, it does not require a permit of the entitled person:

  • making a backup copy, if it is necessary to use a computer program (remember – this copy can only be used by our company and is not made available to other entities). Unless the agreement provides otherwise, this copy may not be used simultaneously with the computer program,
  • observing, investigating and testing the functioning of a computer program in order to obtain knowledge of its ideas and principles by a person having the right to use a copy of the computer program, if, while authorised to do so, he does so during the introduction, display, use, transmission or storage of the computer program,
  • reproduction of the code or translation of its formula if this is necessary to obtain the information necessary to achieve the interoperability of an independently developed computer program with other computer programs, provided that the following conditions are met:
  • such acts are carried out by the licensee or another person authorised to use a copy of the computer program or by another person acting on their behalf,
  • the information necessary to achieve interoperability has not previously been easily accessible to persons authorised to use a copy of a computer program or by another person acting on their behalf,
  • these activities relate to those parts of the original computer program that are necessary to achieve interoperability.

It should be remembered that this information may not be used for purposes other than the achievement of the interoperability of an independently developed computer program, communicated to other persons, unless this is necessary to achieve the interoperability of that program with others, used to develop, produce or market a computer program with a substantially similar form of expression or for other acts which infringe copyright.

Clauses on third party rights should also be included in the contract for the creation of a computer program. In order to protect oneself against possible claims concerning the authorship of a computer program or parts thereof, it is imperative to demand that this liability be transferred to the author of that program/application. Lack of such a provision may entangle us in court proceedings and unnecessarily generate stress.

The last important issue that should be included in the contract with the developer of the computer program is the protection of our commercial data, including our business partners and our company’s technological processes. It is worth reserving a ban on disseminating this information and disclosing it, if the programmer would have access to it.

Moreover, each such agreement should be subject to contractual penalties, which disciplines both parties to act honestly and in a timely manner.