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Technology Tips: What to Avoid when Contracting for a New Website or Software

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Zachary W. Behler
Foster Swift Municipal Law News: MTA Edition
January 2008

1. Consider Work-for-Hire Agreements.

The Copyright Act generally provides that the person who creates the software initially owns its copyright. An independent contractor, as the "author" of the Township’s new software or website, usually retains all copyrights unless he or she assigns the rights to the Township. As the owner of the copyright on the contracted work, the independent contractor the Township hires could limit the Township’s right to use or distribute the software beyond the express terms of the contract. For example, this may mean that software the Township had developed for use in one department could not be used by another department if that use was not contemplated in the original contract. These issues can be avoided if the independent contractor hired to develop the software works under a "work-for-hire" agreement that expressly grants the Township ownership of the copyrights in any software produced.

2. Get Written Assurances that the Licensee will Support the Software.

When upgrading any complex software system – such as the Township’s utilities billing software – you should consider whether the company licensing the software will continue to enhance and support the software in the future. In a world where computer systems become outdated at an increasing rate, the expensive software the Township is buying today may have little or no value next year if the licensing company will not continue to enhance and support it into the future. The Township should avoid investing in new software if the company from which it licenses the software has no duty to continue upgrading the software and working out its bugs. In the worst case, the Township could be forced to buy a second entirely new program. The Township can minimize this problem if the license agreement contains assurances that the licensing company will not discontinue producing and enhancing the program for a period of years. The licensing agreement can also include a maintenance obligation, and while this may lead to added initial expense, it will likely avoid significant additional expense down the road.