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Understanding Website Ownership Issues

Adapted from The Small Business Start-Up Kit

It's obviously in your interest to own all aspects of your website so that you have the legal right to do anything you want with the site. For example, if you fail to obtain a copyright to the site's text content from the Web developer, the developer could potentially prevent you from making any changes to the text on the site. The same is true for images, graphic designs and technologies created by the Web developer for the website. This may sound farfetched to you now, but consider what might happen if you and the developer ever got into a conflict and decided to part ways. A developer with a bone to pick who owns any rights to your site could deal a serious blow to your online business.

Be aware that sometimes a Web developer will not want to assign copyright ownership to your company for certain aspects of the site. As discussed below, this may be perfectly legitimate. What's crucial in this situation is for you to get permission -- legally, a license -- from the Web developer to use his or her copyrighted work as necessary for you to get the full benefits of your website. Without such permission, you'll be at the mercy of your Web developer when you want to edit content or make changes to technology owned by the developer -- a situation you definitely want to avoid.

There are a number of situations in which it might make sense for a Web developer to retain ownership. Developers sometimes will not transfer ownership of technology that they have developed such as content management systems, galleries, shopping carts or other functions. Developing Web applications and using them for multiple clients is the lifeblood of some Web firms, so they naturally are not willing to transfer ownership of that programming code to your company. Instead, they'll give your business permission, or a license, to use the technology in specified ways. This is perfectly legitimate, but you'll need to be careful about a couple of things.

If you are hiring the developer to create functions or other programming code that will give your business a competitive edge online, then you'll want to obtain full ownership of that code so that it can't be used for other businesses. This isn't usually the case with small, basic websites that simply want to establish an online presence. But if you are paying a developer to create an innovative shopping cart or search function that will help distinguish you from your online competition, it's essential that you own that code when it's complete so that it can't be used by anyone else without your permission (and possible licensing fees paid to you).

You need to protect your company's ability to make changes to the site down the road. You should always think about -- and ask prospective developers about -- what will happen if you end your relationship with the developer in the future. If the developer creates the site with proprietary technology, you may find it difficult or impossible to make changes without using the original developer. More than a few businesses have learned this lesson the hard way and have had to create a new website from scratch after ending their relationship with a previous developer who refused to grant permission to the business to make changes to the code the developer owned.

Pay Attention to License Terms
If for whatever reason you and your developer agree that the developer will retain copyright to any portions of your site's technology or content, your contract should state specifically how you are allowed to use these elements. Typically, a technology license will allow you to use and modify the technology as long as it's for your site only -- in other words, you would not be allowed to use the technology for a website for another business you own. If a developer will retain rights to photos, an artwork license will typically allow the photos to be used at the site indefinitely, but not used for other purposes like print brochures or T-shirts. Be sure to understand and abide by the specific terms of your license.

In deciding which ownership or licensing arrangements will work for your business, keep in mind the following rule: The more important content or technology is to your site, the more crucial it is that you either get ownership or a broad license to use and possibly modify those materials. This is true whether or not the Web developer has a valid reason to retain ownership. If it's essential that you own copyright ownership in a database or other technology, don't enter into an agreement that won't confer the rights you need.