Copyright for Computer Software

Copyright for Computer Software

Intellectual property is an asset that affects the valuation of a business. When a business owner wants to sell his or her business or issue securities to an investor, the price per share the owner is going to receive depends on the valuation of the business. The more assets the business has, - the higher valuation it is going to receive.

Some owners of software companies may not realize that their software programs should be copyrighted with the U.S. Copyright Office. Technically, software programs (like any other copyrightable work) automatically get copyright once the work is done or there is at least a working version of the program, even if incomplete. So, if the copyright already exists, why file a copyright application with the U.S. Copyright Office?

Here is why:

1. Registration establishes a public record and lets others know that you hold a copyright on this work.

2. Registering the software program with the U.S. Copyright Office within 5 years of publication (i.e., first availability to the public, such as software release) creates a legal presumption that you are the owner of the program and that all facts in your copyright application are true. It means that if there is ever a dispute over the ownership, the court will presume that you are the rightful owner, and it will be up to the other side to prove otherwise.

3. If you find out that someone is infringing on your software program, you need to have the registration done in order to be able to bring a law suit in the federal court.

4. If you register your software program prior to an infringement or within 3 months of publication (ex: software release), you may be entitled to recover statutory damages and attorney fees from the person you sued. Otherwise, you can only get the actual damages and lost profits, usually a much smaller amount.

5. Finally, registration with the U.S. Copyright Office allows you to record the registration with the U.S. Customs Services (this is less relevant for software programs, but I wanted to mention this anyway).

It does not cost much to register a copyright with the US Copyright Office (currently, $35 for an online registration and $50 for a mail-in one). But the benefits are obvious.

In the next post, I will discuss how you can preserve your trade secrets in the software source code and still file the federal copyright application.

Read more commentary from Arina Shulga on the legal aspects of operating new and growing businesses at Business Law Post.

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