Your SaaS website represents an important investment. It may produce income for you - maybe even a lot of income... either now or in the future.

What if someone made you an offer to buy your website - an offer you can't refuse? Do you really own your website and all of its components? Could you transfer clear ownership to the buyer? Or does the deal fall through because, upon close examination, you really don't own it - or key parts of it?

If you want to analyze the ownership of your SaaS website, you need to think in terms of its component parts. These include:

• web pages - these are the pages that you navigate on your site;
• content - the text, images, audio, and video that you integrate into your web pages;
• background software - software that runs in the background that provides functionality to your web pages, such as the software that generates your online service, shopping cart software, affiliate tracking software, toolbars for maneuvering between pages, search engines, Java applets, and ActiveX controls; and
• opt-in and customer lists.

Except for your opt-in and customer lists, copyright plays a significant role in the ownership all of these components - so, it's a good place to start.

In simple terms, copyright ownership is really important because the copyright owner controls the exclusive right to copy, modify, distribute, and display the works of authorship that are embodied in your website.

Perhaps the best way to approach copyright ownership as it relates to your website is to debunk some of the myths that are floating around.

Not true.

How copyrights are created is really simple, and that's why it's so often misunderstood.

The Copyright Act states that a work is "created" when it is fixed in a tangible medium of expression. This means that a copyrightable work of authorship is created when pen hits paper, or keystrokes are recorded into the RAM of a computer.

Creation of copyrights happens automatically when an original work of authorship is fixed; no registration or other act is required. You might think of this as the "Rule of Automatic Copyright".

What does this mean to you? The author of a copyrightable work is the copyright owner. And since ownership happens automatically, if the work is not registered, there is no paper trail stating who the author is. This fact has significant ramifications if you need permission from the copyright owner.

Not true in most cases.

The general rule is that the creator of the original expression in your website is the author and copyright owner.

An exception to the general rule lies with the "work made for hire" rules which come into play when a person hires another to create a copyrightable work of authorship. This is the situation that is most common with website development.

Facts are critical regarding the operation of the "work made for hire" rules. The key determination is the status of the website developer -- was the developer your regular employee, or was the developer a contractor? In most cases, the developer is a contractor.

The "work made for hire" rules are quite different depending on the status of the developer as employee or contractor, as follows:

• if the developer is an employee acting within the scope of employment, the hiring party (you) will be deemed to be the author and copyright owner of the work product; but
• if the developer is a contractor, then the contractor will be deemed to be the author and copyright owner unless there is a written agreement, signed by the contractor, specifying that the work is a "work made for hire".

What does this mean to you? Typically, the developer is a contractor. For this reason, to be the author and copyright owner of your website, you must have a written agreement, signed by the developer that specifies that the work product is a "work made for hire". Failing any of these requirements, the developer will be the author and copyright owner of the work product (i.e. your website).

Not true.

The Internet is a public medium, but materials published on the Internet are not necessarily in the public domain.

Under the Rule of Automatic Copyright, the author of any original work of authorship will be the copyright owner. The author-owner has the exclusive right to control the copying, modification, distribution, and public display of the work. Anyone who exercises any of these exclusive rights without permission (i.e. a license) from the copyright owner, is liable for copyright infringement.

Public domain works are not subject to copyright. These include works for which copyright protection has expired.

What does this mean to you? Copyrights for most works published on the Web are owned by someone. You might be tempted to grab text or graphics on another site for use on your own site, but you'll need permission (i.e. a license) from the copyright owner to use these materials, else you'll be an infringer.

Not true in most cases.

A copyright notice is not required for works created and published since 1978.

What does this mean to you? For post-1978 published works, you must have permission from the copyright owner to use the work.

Not true.

In the academic world, if you use someone else's ideas, you must give credit, usually in the form of a footnote.

In the commercial world, the issue is not whether you give credit or provide the owner's copyright notice; rather, it's whether you have permission (i.e. a license) to use.

What does this mean to you? If you use someone else's copyrighted work, get permission first. Sometimes permission is difficult to obtain because as pointed out in Myth No. 1, if the work is not registered, there is no paper trail stating the identity of the copyright owner.

Ownership of your SaaS website is relatively complex - you must consider all of the components of your site and determine ownership for each separately.

Copyright is the fundamental intellectual property protection scheme for website components. Understanding the difference between copyright facts and myths is critical to understanding who owns these components.

Copyright © 2009 Chip Cooper

This article is provided for educational and informative purposes only. This information does not constitute legal advice, and should not be construed as such.

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