I’m having a new website developed for my business. What do I need to know before I sign a contract?
These days, every business needs a website. But if you have someone develop your business’s website, do you own it — or do they?
Traditional property concepts might lead business owners to think they own something that they pay for, but that’s not always the case.
A website, including the domain name, code, and “look and feel,” is intellectual property (“IP”), or an “intangible” asset that adds value to your company. A business should own all of its valuable intellectual property rights.
If your business has a website, or will have a website, you should register your own domain name, rather than allowing your website developer to do so. Doing so may help avoid complications down the road regarding who owns the name. When registering, take advantage of the registrar’s automatic renewal services, or make a reminder in your calendar to renew your registration. If you fail to timely renew your domain name it will be available for anyone to purchase.
If you’re using a website developer, make sure to have a written agreement with them that identifies services they will perform, the website’s desired functionality, as well as the project’s timeline, budget and payment schedule. Most importantly, it should assign IP ownership to you, the client.
If the developer will have access to your company’s confidential information, make sure your agreement protects that information, or enter into a separate nondisclosure agreement.
What happens if your company wants to take complete ownership of the website and the code used to create it, but your developer reused code from the public domain or another website? Do you get to own the code or does the developer keep it? This is a great question that the agreement should address.
Typically, ownership rights are allocated between the parties and each party grants a license to the other party to use its assets — the developer will allow the company to use its code and the company will allow the developer to use the trademark, logo, and other content for the website. The cost of having the website developed should reflect payment terms, scope of work, and how extensively the developer assigns IP rights to the client company.
Mary Luros is a business law attorney with Hudson & Luros, LLP, in Napa, and can be reached at firstname.lastname@example.org or 418-5118. The information provided here is not intended as legal advice, nor does it form an attorney-client relationship with the author. The author makes no representations as to the reliability or accuracy of the above information. In a perfect world we wouldn’t need disclaimers — or attorneys.