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Mice Net : June 2009
legal issues databases - useful business tool or pandora’s box? Story By Matt CrouCh ExEcutivE LawyEr, BartiEr PErry SoLicitorS M Just lately Matthew Crouch has had a spate of clients with difficulties arising from their databases. ost service industries these days are heavily dependent on the use of electronic databases. The meetings and events industry is particularly so. Many businesses in the meetings and event space have their database created for them by an external software developer. This is very common because businesses have such specific needs and no single database format fits all. Everyone has a unique way of categorising and cross-linking information about their customers, potential customers, suppliers and other contacts. It’s how we keep, and manage, up-to-date information about those most important to our business. So you have had an external software developer (“Bill”) create your magical new system for keeping all that precious information. You pay Bill a princely sum for it, and as Bill knows the program and seems to know your needs, you enter into a maintenance agreement by which you’ll pay him a monthly fee to keep the database working, fix errors and help tweak it to do want you need it to do. But over time your business grows, and your needs change. You decide that the database needs substantial modification. You ask Bill for a quote to do this. But his price is way higher than another developer you have found (“Ben”) and in any event you think Ben offers clever alternatives that will suit your needs better. Now things go very pear-shaped, very quickly. Your original developer, Bill, is upset that after all the support he has given you, you repay him by using someone else! Your relationship with Bill deteriorates. Bill stops performing maintenance and the database crashes. Your business cannot function without it… You ask Bill for the code of the database so you can get Ben to work on the upgrade and get it working again. Bill refuses. He says that he owns the intellectual property in the database and has no obligation to give you the code. You ask Ben what to do and the only 32 mice.net alternative he can offer is to create a new database from scratch – at a much higher price. It’s an awful feeling - you are trapped, frustrated and angry that you cannot use the very software that you have already paid for. Most importantly, you cannot access your data. Has this happened to you? It is in fact a very common scenario that I have encountered on numerous occasions in recent times. The first question you ask is whether Bill can deny you the code in the original database. Unfortunately for you the answer is that Bill is correct. He created the software and he is the owner of the copyright in it. When we talk about copyright in a database we have to be very careful to distinguish a number of separate elements: • Copyright in the underlying software code (the “source code”) – in our scenario Bill is the owner because he created the code and never transferred the copyright in it to you. If Bill was an employee working for you, it’s likely that the copyright is yours; but Bill is an independent contractor. This means he owns the copyright unless he signed a written transfer to you; • Copyright in the format or structure of the database, ie the way the data is organised on the page. This also is the property of Bill. Again he created it as an independent contractor, so despite the fact that you have paid him for it, he owns it! You may have given Bill the ideas for the structure; indeed you may have even written some of those ideas down, in order to brief Bill – but because Bill was the one who first wrote/drew the structure, he owns the copyright. • Copyright in the data with which the database structure is “populated”. You created this data, so you will be the owner of the copyright in it. But your problem is a practical one. Bill controls the database technically and it has crashed, so you cannot get access to it.