In resolving a dispute as to the ownership of intellectual property rights in respect of software that formed the ‘crown jewels’ of a highly successful investment business, the High Court has ruled that authorship does not necessarily equate to copyright.
A husband and wife had established their partnership around an automated system based on unique mathematical models and algorithms implemented in databases and software which the court found had been substantially written by the husband, a highly skilled mathematician and computer programmer.
It was not disputed that the business had been hugely successful largely as a result of the software – it had been described as the ‘cornerstone’ of its trading system – and, in the context of divorce proceedings following the breakdown of the marriage, a dispute had arisen as to ownership of the copyright therein.
The husband claimed that, as its substantial author, he owned the copyright in the software and that it had been used by the partnership under his implied licence which he had been entitled to determine on resigning from the business.
Dismissing those arguments, the court found that, although the husband had written a substantial part of the software, he had done so in his role as a partner in the business and that the copyright was therefore an asset of the partnership. The software was the ‘essential bedrock’ of the business, had been used and treated as the property of the partnership and could not be separated from the same.
Shortly before his departure from the business, the husband – who subsequently established a new venture employing similar software – had covertly downloaded a copy of the software for his own purposes. The court found that any licence that he may have had to use the software for his own purposes had ceased when he resigned from the business.