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Software development has become the cornerstone of innovation for many businesses, from large corporations to small enterprises. A challenge that is regularly faced by businesses is that the laws trail the speed of software development by about 10-15 years, sometimes longer. Delays in implementing laws and regulations have resulted in confusion and complexity relating to software legal issues and data protection laws.

In this article, our lawyers have answered some of the most common questions asked by business owners in the sector to help you navigate the often confusing legal landscape when developing and supplying software.

Software development laws

Experienced software developers play a crucial role in translating ideas into lines of code. This process, known as software development, is governed by various laws and regulations. Intellectual property rights, particularly copyright, are essential for safeguarding the creations of these developers. Moreover, data protection laws also need to be taken into account during the software development process.

Software licencing considerations

Software licensing laws oversee how individuals and organisations use acquired software, encompassing even free software, which is always accompanied by a license. This license, outlined in a Software License Agreement, delineates the specifics of software usage. Addressing fundamental matters, software licensing ensures clarity on crucial aspects such as:

  • How many copies of the software can the consumer use
  • What type of organisations can use the software
  • How long can the consumer use the software
  • How the software is activated
  • Whether the software can be resold or sub-licenced 
  • How’s the software upgraded
  • Whether intellectual property laws protect the software


Free Software Licence Agreement template


Software licensing legal issues

Businesses must decide on whether to opt for proprietary or open-source licensing. Each option comes with its own legal implications. When utilising proprietary software, developers need to create legally binding Software Licence Agreements that outline the terms and conditions of use. 

When a business is inclined towards open source, it must understand and comply with the terms of the chosen open-source licence. Failing to adhere to these licences can result in legal consequences.

Legal issues of open-source software

Businesses need to understand the terms of the selected open-source licence thoroughly. Certain open-source licences mandate the release of derivative works under the same licence, while others stipulate the requirement for the source code to be accessible to the public. Understanding these distinctions is important to ensure compliance and avoid potential legal disputes.

Indemnities and warranties in software

As a software supplier, you’ll be expected to indemnify your customers against specific issues, particularly concerning intellectual property. For instance, a third party might raise a future claim that the software breaches its intellectual property rights. 

This situation could arise if a contractor develops a portion of the program for your business, potentially utilising code or design principles in which a third party owns the intellectual property rights. As a supplier, you’ll also need to provide the following warranties:

  • To repair or replace defective software within a certain period following delivery
  • That you have the right to grant a licence to the software
  • That the software will comply with data protection laws security 

Legal issues in software piracy

Software piracy is a real concern in the digital realm. Businesses investing time and resources into software development must be vigilant about protecting their creations from piracy. It’s crucial to implement measures to prevent copying, distributing and using their software. This could involve using anti-piracy technology, implementing licence key systems, and monitoring for unauthorised usage.

Confidentiality Agreements for software development

A Confidentiality Agreement (also referred to as a Non-Disclosure Agreement or NDA) aims to stop one party from revealing confidential information provided by another party. When your business starts collaborating with a business for potential software purchases, it’s beneficial for you and the prospect to sign a Confidentiality Agreement. This step becomes particularly important if the prospect intends to test your software before committing.


Free NDA template


Web developer legal issues

Web development, a subset of software development, comes with its own set of legal considerations. For example, if a business is developing a website for a client, the contract between the two parties should explicitly outline matters related to ownership, usage rights, and maintenance responsibilities. Clearly defining these aspects can prevent disputes down the line and ensure a smoother working relationship.

Legal issues in software engineering

Software engineering involves a systematic approach to software development. You should consider the legal aspects during this process, especially when working on projects involving multiple contributors. 

Collaboratively developing a software project requires establishing clear ownership and licensing terms. Businesses should put legal agreements in place to define how they will licence, distribute and protect contributions. This action helps mitigate the risk of conflicts that may arise concerning code ownership and usage rights.

Safeguarding your software development project

If you’re engaged in software development, considering legal issues can safeguard your intellectual property and prevent costly legal battles. Here are some key points to remember:

  • Copyright notice – display a copyright notice prominently within your software code 
  • Software Development Agreements – when developing software for a third party ensure that you sign a Software Development Agreement setting out your rights and obligations 
  • Protection against copyright infringement – regularly monitor for instances of copyright infringement 
  • Documentation – maintain thorough documentation of your development process 
  • Data protection laws - make sure that the software is developed to comply with data protection laws

Get legal assistance from LawBite

As explained in this article, there are multiple legal considerations when developing and licensing software. It’s important to ensure that you take legal advice when you’re looking to develop or licence software. You need to ensure that you have Software Development/Software Licence Agreements put in place before you enter into a relationship with a third party.

Our software solicitors can advise and represent you on all software licensing and development aspects, including drafting agreements, contract issues, data protection laws, confidentiality, limitation of liability, SLAs and warranties/indemnities. To speak to one of our expert lawyers about your software project, book a free 15 minute consultation or call us on 020 3808 8314.


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In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.

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