UK: IT specialists at national law firm Shoosmiths say both parties should set out who-owns-what nice and early.

Solicitor Ross Woodham said: "It is essential for both the commissioning party and the developer to establish early on why the software has been commissioned, and respective expectations about its future use. Then, the contract between client and developer must accurately reflect these considerations."

He said contracts should make provision for:

• ownership of IPRs
• terms of any license granted
• access to source code and hosting arrangements

Woodham said: "Both parties must be prepared to accept a flexible and reasoned approach to IPRs ownership and licensing, to enable them to derive value from the software being developed."

Often, developers provide clients with standard terms and conditions for development services, stating software IPRs will be owned by the developer, and licensed to the client.

"But," warned Woodham, if the client invests significant sums into something unique to their business, not owning the IPRs means it could be sold to rivals by the developer.

"Similarly, software developers should never sign away the IPRs to coding they have written where it is in no way ‘unique' or ‘proprietary' to a particular client, and so could be made available to others."

Woodham said clients and their developers should also thrash out future modification of the developed product, and consider whether the client has access to source code.

If not, opportunities for modification are limited, and the value of the product to the client is reduced.

"It's easy to see how client/developer relationships can turn sour with so much to consider, but extra time and effort spent considering these at the beginning can mean avoiding expensive, time-consuming legal action."