"Dear lawyer, i have created a software: what next?"

Tuesday, 25 of January of 2022

From our mobile device (for some of us as a third hand): the social networks we use to gossip about the lives of the most famous influencers, to our favorite Sunday plan, TV and Netflix®, the trendy food processor and its programs that make our lives easier, or the computers and programs we use to carry out our professional activities, software is all around us.

It is not surprising that software has become one of the most valuable and important intangible assets of certain technology companies and, ultimately, an important source of business and profits. There are many human and economic investments that companies have to make to design innovative software, with the corresponding risks of plagiarism and the possible losses that this could entail.

Therefore, as in the case of any intellectual creation, it is very important to adequately protect the software, in order to guarantee the exclusivity of its owner, protect against potential infringements by third parties and make its exploitation in the market easier for people other than the developer himself.


Software protection: patent or intellectual property?

The first question to ask is what is the appropriate way to protect software?

Law 24/2015, of July 24, 2015, on Patents expressly rejects the protection of software as such through the patent modality (under certain circumstances, it allows the patentability of computer-implemented inventions). This logically implies, that software as such cannot be protected by a utility model either.

The solution to protect the figure of the computer program is through intellectual property and copyrights.

Software is expressly defined in article 96 of the Law on Intellectual Property (Royal Legislative Decree 1/1996, of April 12, 1996, approving the revised text of the Law on Intellectual Property, regularizing, clarifying and harmonizing the legal provisions in force on the subject), by virtue of which "a computer program shall be understood as any sequence of instructions or indications intended to be used, directly or indirectly, in a computer system to perform a function or task or to obtain a specific result, whatever its form of expression and fixation". It follows from the above that copyright protection is granted to the sequence of instructions that compose it, i.e., the source code. 

However, not any software is protectable, but only those that comply with the originality requirement in accordance with the Intellectual Property Law. 

On the other hand, and according to the Intellectual Property Law, the copyright on a software corresponds to the author by the sole fact of its creation, so there is no obligation to register it in order to have exclusive rights over it. However, and although the registration does not constitute a right, it is highly advisable to register in order to be able to prove the date of creation of the software and its main characteristics.


Alternatives for the registration of a software:

 There are several alternatives to contemplate for the registration of a software, whose main purpose will be to attest the date of deposit of the work -to accredit, if applicable, a right of priority in case of plagiarism-, as well as to leave a record of the main characteristics of the software and of its functioning.

The best known way to protect software is to register it in the Intellectual Property Registry, although it has the disadvantage of having to make the software public, thus allowing free access to competitors and other operators in the market. 

For this reason, it may also be of interest a way that is often ignored by right holders: the trade secret. This means of protection (recently extensively regulated by Law 1/2019, of February 20, 2009, on Trade Secrets) allows, by means of the adoption of the corresponding security measures, to maintain the confidentiality of a creation, all this offering its owner tools to prove the date of creation. 

Another protection alternative that is often used in practice is the notarial deposit, by means of which a notarial deed is issued on the technical and functional characteristics of the software and its creation date, allowing its owner to have a private (and confidential) title to guarantee the proof of its creation against third parties.

On the other hand, in recent years, blockchain-based technologies have also been developed, which make it possible to certify the content of certain files (including those relating to source codes). These tools are widely used in practice, since they make it possible to prove the date of creation in the event of possible plagiarism, without the disadvantages of the publicity of the information involved in the Intellectual Property Registry, without the costs involved in the notarial deposit or without the strict nature of the security measures related to trade secrets. 

Finally, in case the software has been developed under contract, it is also of interest what is known as the Escrow contract. In general terms, the escrow agreement is the one whereby the company that owns the rights over the software and the licensee company deposit a copy of the source code of the licensed program with a third party, or escrow agent (in practice it is usually a notary), to prevent the software licensee from being unable to modify or update the software because it does not have the source code, in various cases of conflict (e.g. disappearance of the developer company, impossibility to provide maintenance or update the software, etc.). However, in practice, and although its primary purpose is not this, it can also serve to prove the characteristics of the software and its creation date. 

In short, there are different options for registering software and protecting it against third parties, although the most recommended option will depend on the circumstances of each case and should be the subject of a careful strategy based on the needs of each developer company.


The importance of contracts:

Having said the above, for a correct software protection, registration is not everything and the importance of contracts should not be underestimated. 

As we explained before, the copyright on a software is born from the mere creation, so that the intellectual property rights are attributed to its author, i.e. to the person of the programmer. However, there are many cases in which the programmer of the software does not correspond to the person who will finally exploit it (generally a company), so that the regulation of the labor or commercial relationship originating from the development of the software is crucial for a peaceful exploitation of the software.

On the other hand, as we have already indicated above, in case the software has been developed by a company for a client (generally by order), it is important to deposit the source code before a Notary by means of the Escrow Agreement, in order to guarantee its access for the continuity of the client's activity, thus reinforcing the trust between the parties. 

Other IP rights to be taken into account: 

Finally, it should be noted that other intellectual property rights may be involved when it comes to the complete protection of a software. For example, the name of the software may be protected under trademark law, or the graphic interface may be protected under industrial design law, if the originality requirements for protection as an artistic work are not met.

Therefore, in case of software development -whether by an individual, an SME or a multinational company- it is important to seek advice from a lawyer specialized in intellectual property, in order to guarantee the peaceful exploitation of the software in the market and to be duly protected in case of possible plagiarism by a malicious third party.