In the modern, digital economy, many small business owners depend on their website for new business enquiries or sales, some conduct their entire business through their websites and very few do not use a website at all.

With visibility on the internet more important than ever, the website has become an invaluable tool for the majority of the UK’s businesses, regardless of size. However, many business owners are not aware of significant dangers when commissioning the creation of a website by a third party firm.

The UK200Group is the UK’s leading membership association of independent quality-assured accountancy and law firms, and its member firms act as key business advisers to around 150,000 SMEs across the UK. For this reason the UK200Group is warning SMEs that intellectual property is a key concern for even the smallest of businesses.

An issue that has landed businesses in hot water in the past is ownership of copyright of their own website. If ownership rights are not dealt with prior to the signing of a commissioning contract, the completed product – whether that be a website or piece of software – will belong to the creator of the work, rather than the business which paid for it!

The ideal time to discuss copyright ownership rights in the process of hiring a web or software developer is before any contracts have been agreed. By negotiating this when the developer is looking to win the commission rather than when they have already built up IP value that is legally theirs, you ensure that the outcome is better and there are no hidden costs at the end.

Philip Partington, Senior Solicitor at intellectual property experts and UK200Group member Virtuoso Legal, said, “The internet is changing the way that many of us do business, and in today’s busy marketplaces it would be difficult to compete without embracing the benefits it can bring us.

“While the digital economy has had a democratising effect in many ways, and has broken down barriers to entry, SMEs and owner-managed businesses must be careful that they are taking proper precautions before commissioning websites or software.

“It goes without saying that smaller businesses rarely have the resources to go over contracts with a fine tooth-comb, so they are more commonly caught out by intellectual property pitfalls than traditional corporates.

“My advice to small firms is that correct – or incorrect – use of IP protection can make or break a firm. By properly protecting a website, piece of software or any other piece of intellectual property, you can create valuable assets. However, failing to take the necessary precautions can leave you vulnerable to competitors and the creators of commissioned work.”