{"id":1760,"date":"2024-01-02T15:13:24","date_gmt":"2024-01-02T12:13:24","guid":{"rendered":"https:\/\/www.gulmalkoc.com\/en\/?p=1760"},"modified":"2024-01-02T15:13:24","modified_gmt":"2024-01-02T12:13:24","slug":"right-ownership-in-software-development-contracts","status":"publish","type":"post","link":"https:\/\/www.gulmalkoc.com\/en\/intellectual-property-and-technology-law\/right-ownership-in-software-development-contracts\/","title":{"rendered":"Right Ownership in Software Development Contracts"},"content":{"rendered":"

Introduction<\/strong><\/p>\n

The rights ownership of software offered by software companies to customers has different dynamics between software packages developed for general use and software developed on special order. These two scenarios vary according to the way the software is introduced to the market and customer demands. When we examine the two cases in detail, the results are as follows:<\/p>\n

1. Package Software<\/strong><\/p>\n

Packaged software is software developed and released by a company or a natural person for general use, which can be purchased and used by any user. For example, the sale of packaged software such as Microsoft Office or Adobe Photoshop involves the user obtaining a license. In this case, the rights holder is the person or company that developed the software. With the sales contract, the ownership of the software passes to the buyer and the buyer obtains the right to use it.<\/p>\n

2. Software Developed to Order<\/strong><\/p>\n

In the case of software developed for the customer in line with special requests, the issue of right ownership becomes more complex. In the case of custom software developed at the customer’s workplace and with the contributions of its employees, it is debatable whether the work is considered a collective work. The two main situations can be analyzed as follows:<\/p>\n

2.1. If the software developer works under the supervision of the client;<\/strong><\/p>\n

The software developer, who works under the constant supervision of the client and in compliance with the directives given, usually creates the work within the framework of an “labor contract”<\/strong>. In this case, the owner of the work is the employer, i.e. the customer. The client takes ownership of the software and has the full, unrestricted right to use the developed work.<\/p>\n

2.2. If the software developer works independently of the client;<\/strong><\/p>\n

There may be cases where the software developer develops the work in line with the customer’s demands but independently of the customer. In the case of software developed specifically for the customer, there is a “contract of work”<\/strong> between the customer and the software company or real person who creates the work. With the contract of work, the contractor (software company) is under the obligation to create the work requested by the customer and to transfer the financial rights on this work to the customer. In this case, the owner of the work is the contractor as the real or legal person who creates the work. In other words, although the software source code belongs to the software company, the rights arising from the source code and regulated in Articles 20 and following of the Law on Intellectual and Artistic Works (FSEK) numbered 5846 must be duly transferred to the customer.<\/p>\n

Transfer of Rights According to FSEK<\/strong><\/p>\n

According to FSEK, the transfer of rights determines the use of financial rights. The author’s rights such as the right of processing, the right of reproduction, the right of dissemination, the right of representation, the right of communication to the public and the right to share and trace may be transferred to others by contract. However, this transfer must be in accordance with the procedures and conditions set forth by FSEK. Likewise, pursuant to Article 48\/1 of FSEK, “the use of financial rights may be transferred to others with or without limitation as to duration, place and content, with or without consideration.”<\/em><\/p>\n

Source Codes and Content of Software Development Agreements<\/strong><\/p>\n

It have great importance that the transfer of rights agreement is properly drafted. In particular, a contract that does not contain the conditions required by the FSEK may lead to serious legal problems for the software developer. Failure to prepare the agreement in accordance with the law may result in the company not being able to generate commercial income from the software it has developed and incurring serious damages in the process. For this reason, the contract between the parties should detail who owns the intellectual property rights in a way that leaves no room for doubt. Likewise, provisions regarding the ownership of confidential information and intellectual and industrial property rights on software should be handled separately.<\/p>\n

The ownership of the source code and how the financial rights on the source code can be used should be clearly stated in the contract. For example, a general statement that “all financial rights are transferred in accordance with Articles 20 et seq. of FSEK” is not sufficient. Since Article 52 of FSEK stipulates that “Contracts and disposals relating to financial rights must be in writing and the rights that are the subject matter must be indicated separately”<\/em>, the contract must contain clear and detailed information regarding the transfer of financial rights. Therefore, the text of the contract should clearly set out the financial rights and other relevant matters. A detailed contract to secure the rights of the software developer will provide a fair balance between the parties by avoiding legal uncertainties.<\/p>\n

Conclusion<\/strong><\/p>\n

In a financial rights transfer agreement made in general terms, the party that develops software on order may say to the contractor (i.e. the software company) “I did not develop the source codes by processing and did not allow a product to be made different from the relevant source codes”, and this may put the software company in a difficult situation in its commercial and legal processes. Therefore, it should be correctly designed which financial rights on the source codes subject to the contract will belong to which party and how these rights will be managed.<\/p>\n

As a result, the issue of software rights ownership will vary depending on the nature of the software developed, its intended use and customer relations. Contracts prepared in accordance with FSEK will clarify the relations between software companies and customers and prevent potential legal problems.<\/p>\n","protected":false},"excerpt":{"rendered":"

The rights ownership of software offered by software companies to customers has different dynamics between software packages developed for general use and software developed on special order.<\/p>\n","protected":false},"author":3,"featured_media":1761,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[26,32,33],"tags":[68,67,65,66,64,63],"class_list":["post-1760","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-intellectual-property-and-technology-law","category-contract-law","category-start-up-vc","tag-intellectual-property","tag-it-law","tag-package-software","tag-software-developed-to-order","tag-software-development-contracts","tag-software-law"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/posts\/1760","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/comments?post=1760"}],"version-history":[{"count":1,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/posts\/1760\/revisions"}],"predecessor-version":[{"id":1762,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/posts\/1760\/revisions\/1762"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/media\/1761"}],"wp:attachment":[{"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/media?parent=1760"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/categories?post=1760"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.gulmalkoc.com\/en\/wp-json\/wp\/v2\/tags?post=1760"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}