In the 1920s, George Parker made a small fortune selling the Brooklyn Bridge to tourists. A gregarious man and famed storyteller, Parker was caught and sentenced to life imprisonment in 1928. It was these stories he told in prison that sparked the popular saying “ if you believe that, I have a bridge to sell you ”.
In Parkers case, he sold something that wasn’t his, to people who believed it was; clearly an act of fraud. But what if you wanted to sell something that you believed you owned, only to find out that it wasn’t yours at all? You may be surprised to find out that without a legal contract you don’t own your website.
As industries go, web design and development is still in its infancy. It’s the Wild West out there – unregulated and uncontrolled – and agreements to design and build a website are often still undertaken verbally. I regularly hear the objection that it is too expensive to hire a lawyer when I counsel small business owners to obtain a legal contract prior to having their website built. Sadly I hear stories, months later, of tensions and conflicts that have arisen entirely over questions of ownership and legal rights, making the cost of a lawyer relatively cheap in hindsight.
So who owns your website, including the code and the graphics? According to Maria Holman , Lawyer and Trademark Agent for Lindsay Kenney LLP ( http://www.lklaw.ca ) “ The general rule of copyright is that the creator of a work, whether the work is programming, written content, graphics, etc, is the owner of the work ”. Without a legal contract the owner of the website is the person who created it. She continues; “ the web site owner needs to get the contractor to assign to the client, in writing, all of the contractor’s rights in what they have created. The contractor should also be asked to waive his or her moral rights ”.
When the time comes and you decide to sell your business you cannot include your website as an asset if you do not own it. For example, if you own a successful retail business which operates entirely online, you may not be able to sell your business if you cannot include the code that runs the shopping cart. The old saying “ CYA – Cover Your Assets ” rings true.
Consider Jenny Yu , owner of Meet Tutors Online ( http://www.meettutors.com ). A client of mine at Small Business BC, Jenny wanted a website that was able to match tutors and students and enable double-blind communication between them. What she needed was a company that was able to build such an application but also be willing to transfer the ownership of the website to her.
In the fall of 2006 I helped her find DPG Associates Web Design ( http://www.dpgassociates.com ). Dawayne Wurtz , the owner of DPG, negotiated an agreement with Jenny, “ in a nutshell, the most important aspect that Jenny wanted to resolve was the ownership of the web site once it was completed. This including the Graphical User Interface (GUI – the design including the look and feel), the intellectual property and copyright of the design and development of the web site, and the source code including the “double-blind” software application that DPG was going to develop for her ”.
Jenny explains it this way, “t he bottom line of the ownership agreement that I have with Dawayne is basically I own everything. All my development costs are capitalized and booked as asset on my balance sheet. In short, I own it and I can sell it anytime . But, I have to say that without your advice on the legal side of website development, I could be one of the new start-ups who BELIEVE they own the codes that make their sites, when they actually do not ”.
In matters of ownership, ignorance is not bliss! Hire a lawyer to write a contract when you have your website built, thereby protecting your rights and guaranteeing your ownership – because you can’t sell what isn’t yours.
