A website are composed of various parts, created by developers or designers, contributed by a client or purchased from third parties. All parts from different sources, or owners, become part of the same website. Combine that with intellectual property rights and liability, and website ownership becomes a complicated and sophisticated subject.
Below we discuss two aspects of website ownership that are often misunderstood.
Fee-based or open source software used to build a website
Odds are, your website was developed using licensed software. For example, Wordpress, the most widely used CMS by a large margin, is an example of licensed, open source software. By current measure, around 75 million Wordpress website’s existed in 2014.
Licensed software is not owned by the licensee. The licensee has the right to use the software. Therefore, getting back to our Wordpress example, roughly 75,000,000 website owners in 2014, didn’t actually own their website. Surprised?
Understanding this idea is easier for software licensed for a fee. Websites built on squarespace.com disappear if the websites owner stops paying the monthly license fee. Obviously, the website was “owned” in name only.
Still the perception endures that website owners own their websites. I know this, because, while being interviewed by potential clients, I am often asked the question, “Will I own my website?” No, you won’t.
So who “owns” the liability if the licensed software used to run your website infringes on a patent? Who’s at fault if a flaw in licensed software causes a 3rd party a loss of revenue or reputation, which they want to recoup, potentially in a court of law.
For fee-based licensed software, normally the licensor indemnifies the licensee for all sorts of things, barring negligence and / or criminal behaviour. For open source software, the relationship is reversed, you indemnify the licensor. For example, see Wordpress’ Terms of Service indemnification clause.
If your website is built on open source software, you are probably liable for claims arising from its use, even though you don’t own it. If it makes you feel any better, you’re also not paying hundreds of thousands of dollars for a license or millions of dollars developing an alternative from scratch.
But coming back to the original theme, software ownership becomes even more surprising and complex when hiring a web designer to build your website using licensed software.
In talking to a web designer, ask specific question about what you will own. “Will I own the designs?” “How about the HTML?” Ask about any software being used, licenses required and terms of service. Ask what sort of warranties and indemnifications the designer offers?
Who knows. You might end up being thankful you don’t own your website.
Custom created assets such as code and designs, otherwise known as “Intellectual Property”
According to Wikipedia, intellectual property (IP) “refers to creations of the mind, such as inventions; literary and artistic works; designs; and symbols, names and images used in commerce.”
Question. Who actually creates the logo, the web designs or the code for a website? Most often, a designer or developer does. Hence, a website owner may or may not own the intellectual property created during a website design project. Depending on the terms of the work, the designer may own it, even though the website owner paid for the work to complete it and is using it daily to run their business.
In regard to the transfer of money versus work versus work product ownership, the terms in many web contracts define the website owner as paying for the work to create the IP, but not for the IP itself.
For example, a contract may designate the designer as the owner of the IP and the client as the owner of a license to use the intellectual property, worldwide and in perpetuity.
So now we’re back to licensing. So all the website owner ever receives is a license? Sounds shady, right?
Not necessarily. If you’re only paying the designer for their labor, then obviously you’re not paying for ownership of the product of that labor. The designer owns what they create. You didn’t pay for the creation itself, but the designer is more than happy to grant you a license to use said creation.
Still sound shady? Only if the designer is not open about the terms of their work. And keep in mind, it is also possible the terms of work stipulate reversed ownership and usage rights.
In summary, a website owner does not necessarily own their website at all. They may own parts of their website, depending on prior ownership rights or rights extended under the terms of an agreement. But for much of their website, they may only own the right to use it.
In the rush to create a new website, a brand or other creative assets, ownership is often overlooked. Contracts are signed and often neither party really understands the terms. While it is rare that someone is entirely precluded from using their website or creative assets, such as a logo, paid for under a scope of work, it is important to understand ownership or rights of use before signing a contract or license and using that understanding to craft an agreement that is agreeable to all parties.
Hence, while interviewing a web design company, ascertain specifically what parts of the website you will actually own, not own, or have a right to use as well as the potential impact on you or your business.
Author: Todd Johnson, Managing Director, Avatar New York
Avatar New York is an innovating, award-winning New York web design firm dedicated to providing clients with responsive websites that help grow brands and convert visitors to customers. With an expertise in web development, branding, cloud hosting, mobile app development, and CMS and e-commerce solutions, Avatar New York's top tier designers have the ability to create intelligent websites for any type of business.