Software & IT IP Dispute Solicitors

What rights do consumers have against my business if they do not like the goods they have bought?

If the goods are not of satisfactory quality then the consumer can choose from a number of legal resolutions, ranging from insisting on a repair or replacement, to rejection and a refund.

There are identical provisions in other Acts imposing the same regime on other types of transactions, such as hire purchase agreements and conditional sale contracts.

There are many possible answers to this question, which will vary depending on the precise nature of the transaction, what the consumer does with the goods in the meantime, and so on.

How does copyright apply to software?

In general, copyright (and any patent rights) will remain with the software owner (e.g. Microsoft). When you buy the software, you are buying a licence to use it. The copyright owner still has ownership and can and normally will restrict how you can use the software. Infringing copyright by, for example, making unauthorised copies for commercial use lays you open to both civil and criminal legal action. Even if the software is advertised as “free” for public use this does not normally include the right to use it for commercial purposes.

What is a software licence?

A software licence sets out the terms on which you are allowed to use that software. The usual terms in a software licence will typically include:

• the number of copies of the software you are allowed to make and use
• any restrictions on using the software. (For example, Microsoft offers cheap licences for academic use only, which prohibit commercial use)
• prohibitions on modifying the software

Breaching the licence terms can lead to legal action against you in the civil or even criminal courts.

How can we ensure that a computer system we buy does what we want it to do?

If you enter into a contract to purchase an assembly of off-the-shelf hardware and software items, that is what you will get. Whether it does what you want it to do will be something you must satisfy yourself about before you make the purchase.

Alternatively, you can contract to purchase a bespoke IT “solution”. As well as specifying what items you want to purchase, you also specify what you want the system to do. For example, if you want to network some computers in your office, instead of just saying that you want specific software and cabling, you specify how you want the network to perform. The supplier will then also be responsible for meeting that ‘functional specification’.

Do I need a written contract?

In business, IT solutions are often ‘critical tools’, and any problems could cause significant damage to the performance of your business. In these circumstances, a written contract is always a good idea. Do not assume that the “standard” terms and conditions of supply from an IT developer will meet your requirements as this is seldom the case. Do read the terms carefully and amend, add or delete as you require. Or instruct us to do this for you.

Never sign an agreement if it contains any terms which you do not understand or where you are unsure of the legal consequences.

How should I expect my solution to perform?

The functionality of the solution can be measured against a ‘Functional Specification’ document. It is possible to contractually commit a solution provider to deliver a system which performs materially in accordance with the functional specification.

Measuring functionality is difficult. However, if it can be proved that the agreed functionality was not achieved – for example, if an internet based ASP solution only operates 95% of the time (as opposed to the agreed 98%) – then this could give you a right to claim damages provided that the agreement is properly drafted.

Take advice if you are uncertain how to prepare an appropriate functional specification.

What if the IT solution fails to work properly?

If you have not yet paid for the solution, you may not be legally obliged to pay for it until it works properly, or you may be obliged to pay only for those parts which are satisfactory (for example, functioning hardware which has been supplied). The exact position depends on the terms of the contract. The contract might include provision for compensation.

If you have already paid, you may need to get the supplier (or a third party supplier) to repair, replace or even completely redevelop the solution, at their cost. Which of these applies will again depend on the contract. The supplier may be willing and able to sort out the problems quickly; you may have to negotiate a solution; or, in the worst case, you may need to take legal action

What key elements should I put in my IT maintenance contracts?

Key elements include:

• what routine maintenance will be carried out, how often (e.g. an annual ‘service’)
• how quickly your supplier will respond to emergency maintenance requests
• where maintenance will take place (e.g. on your premises)
• whether alternative facilities (e.g. a substitute computer and/or software) will be provided during repairs
• what charges there are (e.g. annual maintenance fee, emergency call out charge, costs of parts and labour etc.).

What happens if we use more copies of software than we have purchased?

Unsurprisingly, software owners take a dim view of this sort of activity and actively pursue companies who infringe their rights – even when they are customers. The British Software Alliance offers a reward of up to £10,000 for information on the illegal or unlawful use of software. Disgruntled employees and ex-employees might ‘whistle-blow’, as might consultants who work on your computer system and discover unlicensed software use.

Am I allowed to make backups of my computer software?

The Copyright, Designs and Patents Act 1998 specifically allows the making of backup copies of software, but only provided it is for lawful use, and most software licences specifically state that you are allowed to make a copy to use as a backup. But making a ‘backup’ and then using it on another computer is not permitted.

If there is any doubt over what constitutes a backup, check your licence agreement or contact the software publisher or licensor.

How can we protect ourselves against employees’ misusing the computer system?

As a general rule, you are liable for your employees’ actions, so it is important to minimise the risks.

Set up clear policies – for example, providing guidance on how to use e-mail and what content would be inappropriate. This will help to provide some protection, but only if you enforce the policies – simply stating that misuse is forbidden, but doing nothing to stop employees doing so, will provide little or no legal protection.