In the Making of a Computer Program, Who Exercises the Control?

The question surrounding the ownership of copyright is becoming increasingly relevant to businesses, particularly when they outsource the creation of works to independent people or companies, like program developers, designers or marketing companies.

A basic principle of copyright law is that the author and/or creator of a copyrighted work is in most instances also the owner of its copyright. However, the question as to who is the author or creator, especially when it comes to computer programs, is a bit more tricky.

With this in mind, what is the position when a company outsources the creation of a work to an independent person or company, without a proper written agreement?

 

Bergh and Others vs. The Agricultural Research Council

This is the question that the Supreme Court of Appeal (SCA) recently faced in the case of Bergh and Others vs. The Agricultural Research Council (Case no. 93/2019), handed down on 1 April 2020.

In its application to the Western Cape Division of the High Court (the Court a quo), the Agricultural Research Council (ARC) sought and obtained extensive relief in relation to its alleged ownership of a computer program referred to as BeefPro. The ARC contended that BeefPro qualifies as a work defined in the Copyright Act, 98 of 1978 and that the then Respondents (five of whom were the Appellants on appeal) misrepresented that they had developed BeefPro and impinged on its right to ownership in various forms.

The Court on appeal was furnished with only the order of the Court a quo. It was, however, clear from the order that the copyright pertaining to BeefPro vested in the ARC, and not in any of the Respondents.

The SCA confirmed that this appeal was not about the complexities of copyright law but about whether the ARC had discharged its onus in proving its ownership in the BeefPro computer program.

Here are the facts: The ARC purported that it introduced BeefPro, a Microsoft Windows- based cattle or herd management system, into the market in 2005. The ARC was of the view that the creation and development of BeefPro, which required knowledge of animal science to develop, was carried out under its control and that it was therefore its author.

On the other hand, Mr Pauw, the fourth Appellant, claimed that he, as the software developer, was the true author and owner of the BeefPro program, since he created it independently of the ARC.

Mr Pauw submitted that he was approached by the ARC during 2005 to develop a software program for beef cattle management. Since the ARC was unable to finance the suggested program, Mr Pauw agreed to develop the program for no remuneration on the condition that the copyright would vest with him. According to Mr Pauw, the representatives for the ARC agreed to these terms orally. This oral agreement was later reduced to writing but the drafts were never signed by the parties.

The ARC did not dispute this and, based on these facts, the SCA indicated that the main question to answer was whether the ARC had discharged its onus of proving ownership of BeefPro.

 

Haupt T/A Soft Copy vs. Brewers Marketing Intelligence

The Copyright Act defines the author of a computer program as: “the person who exercised control over the making of the computer program”. The question of authorship of computer programs was previously considered by the SCA in Haupt T/A Soft Copy vs. Brewers Marketing Intelligence (Pty) Ltd 2006 (4) SA 458 (SCA).

The Court in Haupt stated:

“…Haupt could, at any time, direct in which direction the development of the program should proceed, or could terminate further development if he wished to do so. Haupt was, therefore, in a position of authority over Coetzee insofar as the development of the program was concerned. He was in command and Coetzee subjected himself to such command. …I am of the view that Haupt controlled the writing of the computer programs...”

 

The SCA’s conclusion

By taking this passage into consideration, the SCA concluded that the ARC was required to show that it exercised control and supervision over Mr Pauw in the development of BeefPro.

After evaluating the facts, the SCA concluded that Mr Pauw had developed the program, working independently and bringing his own skills and experience to bear, only seeking certain information from the ARC to ensure that the program served its purpose. Mr Pauw did not follow instructions from, or work under the supervision of, anyone at the ARC.

As the independent developer of the program, Mr Pauw did not have to obtain, on an ongoing basis, the approval of anyone at the ARC and the technical aspects of his work did not have to be checked by someone in authority at the ARC.

The Court emphasised that the mere provision of functional requirements, a periodic review of progress being made, and testing to determine whether the program meets its purpose, does not establish control and does not vest authorship.

Since the ARC did not exercise control and supervision over Mr Pauw in the development of BeefPro, the SCA concluded that he created the program independently and that the ARC had failed to discharge the onus in relation to its claim for copyright. Therefore, the SCA found that Mr Pauw was the author and owner of the copyright vested in the BeefPro computer program, and the appeal was upheld with costs.

 

Lessons for the layperson

What can the layperson take from this judgment?

It is important to have a proper written agreement in place to reflect the ownership of intellectual property, including copyright. With such an agreement is in place, there will be no dispute down the line regarding possible infringement and/or ownership. However, if no such agreement exists, and the instructor does not exercise control and supervision over the creator, it is safe to assume that the creator is the author and owner of the computer program.

Date published: 15/07/2020
Author: Reinard Krüger, Bianca Balt, Spoor & Fisher

Tags: intellectual property copyright law copyright legislation