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Software Government The Almighty Buck The Courts

Copyright vs Exclusive License? 95

Posted by Cliff from the what-rights-do-you-have-if-you-paid-for-the-development dept.
cdanzig asks: "My company recently hired a development house to do some contract work for us. They did great work, but they are claiming that they now own the copyright on the code and are issuing us a permanent and exclusive license. My bosses are concerned that this will hamper our ability to make changes to the code or prevent us form being able to claim the software as a company asset. What is expected protocol between a client and a development house? What is the long-term difference between owning a copyright and owning an exclusive license? If we paid for the development of the code, is it fair for us to demand ownership?"
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Copyright vs Exclusive License? More

Copyright vs Exclusive License?

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  • This is an Ask Slashdot FAQ (Score:5, Informative)

    by Bruce Perens ( 3872 ) * <bruce@perens.com> on Thursday April 26, 2007 @02:23PM (#18888403) Homepage Journal
    This kind of question pops up on Slashdot quite often. It's usually of the form "I should have had a lawyer when I started this, now what do I do?"

    If your company didn't negotiate this when you hired the development company, it's your company's fault. But all is not lost. You may be able to prove that the software is a work-for-hire. Get a lawyer. Your laywer might be able to negotiate in a way that you can not, because it will be clear when the lawyer calls that you would consider a lawsuit. Tell the lawyer you want the other company to provide the copyright, and your legal fees.

    Next time, have a lawyer work with you before you sign a contract with any company.

    FYI: I am an expert witness. I get paid to testify in lawsuits when engineers don't call laywers before they accept a license or sign an agreement.

    Bruce ~

    • Re: (Score:2, Insightful)

      by Timesprout ( 579035 )

      Tell the lawyer you want the other company to provide the copyright, and your legal fees.
      Admitting you made a mistake and then trying to bully your way out of it with implied legal action and the threatof costs is a pretty transparent strategy that is more likey to cause animosity and a countersuit. Better to ask them first if they have any objections to you modifying the code for internal use, which they probably wont and get that in writing.

      • Re:This is an Ask Slashdot FAQ (Score:5, Informative)

        by Bruce Perens ( 3872 ) * <bruce@perens.com> on Thursday April 26, 2007 @02:40PM (#18888705) Homepage Journal
        I think they need a lawyer to at least explain to them what they signed. They may have explicitly signed their rights away, in which case they may have little recourse. If they did not sign their rights away, they need to have the lawyer explain that, too. They might actually be right. And even if they are not right, they get to play "which side blinks first". A lawyer can look at the other company and tell them the probability of that game being successful or not. Also, the development company might not have much in the way of grounds for a counter-suit, and may prefer to have repeat business and good references to having a lawsuit on their record whenever anyone else checks up on them before choosing their company.

        Bruce

        • Re: (Score:3, Insightful)

          by Timesprout ( 579035 )
          Of course they should get a lawyer to examine what if anything they signed and clue them in. They may be fine or as you point out if they did not request copyright in a written contract then (a) they are naive and (b)in a difficult position. Trying to immediately legally intimidate (I am assuming the initial agreement was a lawyer free mutual one) and pass on the costs of their mistakes to the developer will most likely immediately kill all good will and unless the developer is poverty stricken eliminate al

        • I think they need a lawyer to at least explain to them what they signed.

          Yeah, but that's a Hell of a lot different then getting a lawyer to bully the poor contractor, which is what you advocated in your previous post!

          • Re: (Score:3, Insightful)

            by BobPaul ( 710574 ) *
            If you tell a Lawyer "These guys won't give us our copyrights like they were supposed to! Sue them and make them pay our legal fees to." The first thing the lawyer is going to say is, "Ok, but it's $100/hr and you have to pay me for the time being. You'll get a "rebate" if we win legal fees" The next thing the lawyer will do is examine the contract and size up the opponent. This results in "Contract is in our favor, we should sue," "Contract is not in our favor, but they'll probably blink first" or "Contrac
        • I have a question. What particular pitfalls do you need to watch out for when you're signing a contract to do business with the government? Particularly with the FAR clauses, which are gargantuan in size and pantagruelian in complexity.

          I was offered the opportunity to do a subcontract for a company doing business with the government and their contract included an Incorporation by Reference of the FAR clauses which I tried to investigate and got lost in the maze. "Incorportation by Reference" means that t

      • Re: (Score:2, Insightful)

        by Anonymous Coward
        if they have any objections to you modifying the code for internal use, which they probably wont

        It is very likely that that is exactly why the developers want to retain copyright. If they can forbid modifications by the customer or people hired by the customer, then they have a monopoly on the supply of further development, with the cost of the first version as a barrier to entry into the market for anyone else.

        • Actually, the first thing that occurred to me was "What about the ability to resell the program?" It seems to me that, from the standpoint of the development house, maintaining the copyright is a means to prevent the client from going out and reselling your work, in all or part, and basically shutting them out from other potential clients. It would suck to be underbid by someone else legally reselling your own work.

          I'll agree with almost everyone else here and agree that this sort of thing really shou

        • Re: (Score:2, Interesting)

          by Maximalist ( 949682 )

          I don't know that getting a strongarm monopoly is the only reason that these guys would desire to maintain some rights in the copyright to the code they created. They may very well recycle snippets of code from project to project, and don't want to be put in a position where a former client finds out that they do so, and then claims that they're infringing on a copyright for code that they themselves wrote. I'd certainly not want to find myself in that position.

          There has to be an agreement to share righ

          • Re: (Score:3, Insightful)

            by B'Trey ( 111263 )
            IF this isn't a simple work-for-hire situation, that seems quite fair, unless the customer is willing to pay a lot more money to the developer for sole ownership of the copyright, who then be saddled with the need to reinvent the wheel on future projects.

            If this is the company's standard method of operating, it's quite likely that they reused a few wheels in this project. Turning over the copyright may require extensive rewriting to remove code that's already in other projects to which they retained the co
            • It really is possible to vend a separate and independent copyright to a work. I've done it as a contractor. So, I am not clear that this is a problem unless there is code the contractor does not own.

              Bruce

              • Re: (Score:2)

                by Baddas ( 243852 )
                "exclusive licence" means exactly that, nobody else can use it even if they still own the copyright.

                EG I develop something for you, retain copyright, and give you an exclusive license.

                Now, you can't go resell it, because you are only licensing it. And I can't go resell it, because you have an exclusive license.

                Unless he didn't really mean 'exclusive' license.
    • Bruce, is this your first First Post? I don't recall seeing one from you in the past. :)

      • Bruce, is this your first First Post? I don't recall seeing one from you in the past. :)
        Oh, on the contrary. Perens is the guy behind all those "fr0sty piss" first posts. He just remembers to check the "Post Anonymously" box when he does that. :-)
      • It's really easy to make first posts when you are a subscriber. Just type in a response and stick it in the clipboard, and then wait for comment posting to be enabled. I've made at least one other.

    • Re: (Score:2, Interesting)

      by Anonymous Coward
      You may be able to prove that the software is a work-for-hire.

      Obviously, a lot depends on what they did sign. But assuming they paid the company to write the code, that would clearly seem to fit the definition of "Work for Hire", and the contractor would need to prove that it wasn't by the wording of the original contract, and if the person who signed that contract did not realize that clause was there, thats potentially reason to nullify the contract.

      Most likely the author now wants to resell his work

      • Re: (Score:3, Informative)

        by cpt kangarooski ( 3773 )
        But assuming they paid the company to write the code, that would clearly seem to fit the definition of "Work for Hire"

        No, that's not really enough. Generally, it needs to be made in an employee/employer relationship. There's a whole laundry list of factors that go into that. CCNV v. Reid has a good summary of them.
    • A work for hire agreement cannot be implicit or be an oral contract. The law says it must be written down and clearly be work for hire. The only time this is not the case is when you're dealing with an employer/employee relationship. In that case work for hire is assumed. Also, in my understanding of the law, only specific types of work are eligible as work for hire arrangements (again, outside of employer/employee) and software development is a type of work that is not eligible to be work for hire. I would
    • Bruce, this is particularly bad advice, because there's no way for software to be a work-for-hire in the United States, unless there's some soft of judicially-created addition to the Copyright Act that I'm not aware of. In order to be a work-for-hire, in addition to the requirement that there be an express written agreement designating the work as a work-for-hire, it must fall into one of the statutory categories:
      a contribution to a collective work
      part of a motion picture or other audiovisua
      • You missed "Or any work created by an employee as part of his employment."

        It's really up to what the contract says.

        Bruce

        • How likely do you think it is that this would be held to be employer / employee relationship? The OP gives us little in the way of details, but I'd say it's really bloody unlikely, because the general practices of "development houses" wouldn't qualify. If there's a single contract with another company for development, that cuts *against* it being an employer / employee relationship, because that's how one hires a contractor, not an employee. It seems really unlikely that the programmers working on the proje
          • You are assuming that they companies failed to negotiate the disposition of the copyright properly but succeeded in making sure to do everything necessary so that they wouldn't be statutory employees. For all we know there might not be a contract.

            It could also fit under a contribution to a collective work.

            And even if it is not a work for hire, the contract could be to convey all rights as if it were.

            Bruce

            • I'm saying that I *really* doubt that the people working on this contract work were declared employees for tax purposes (I really doubt that the hiring company payed FICA taxes, for instance); I *really* doubt that they received benefits from the hiring company; I *really* doubt that they were paid as the hiring company paid its employees. I'm not saying that the parties did this intentionally, I'm saying that this is most likely to be the case.

              For the record:

              A "compilation" is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. "Compilation" is defined as including "collective works," which in turn are defined as works such as periodicals, anthologies, or encyclopedias, in which a number of contributions, constituting separate and independent works in themselves are assembled into a collective whole.

              Yes, the contract could have been written in su

              • So, "cdanzig" the original poster, finally chimed in and said in this comment [slashdot.org] that it's "a very informal agreement, mostly verbal". Not the way I'd want to run a company. But IMO this is the exact condition in which one might have a hope of successfully treating it as a work-for-hire.

                Bruce

    • Bruce is completely correct. This article deals with ommisions. Either there is a contract and the submitter failed to read it or there never was a contract. If there wasn't a contract, then copyright vests in the author.

      In a lawsuit, one side says it was a work for hire, the other side says it wasn't. The presumption is no asignment unless expressly assigned. From there, you get into all the stuff to assume existence of a contract based on actions by the parties. sigh

      What is the software for? Is

      • F.Y.I. I am a lawyer and I occasionally get free beer if I read a contract at the bar.

        Where do you drink? :)

    • The "work for hire" thing really might be the saving grace of the O.P. My background is in the entertainment industry, but I, too, am more than familiar with the gory details of copyright law. If the O.P.'s company can prove that the software was written specifically to satisfy the request of the O.P.'s company, and none of the custom work was generated prior, then there's a good chance that it's a "work for hire".

      Kudos to you for bringing it up.

    • This kind of question pops up on Slashdot quite often. It's usually of the form "I should have had a lawyer when I started this, now what do I do?"


      Yeah No kidding.

      What is expected protocol between a client and a development house?

      When they do this, sue the everloving @#&% out of them. If you paid to have it written, it's yours... of course, you should check your contract... if you have one.

    • Re: (Score:2, Informative)

      by cdanzig ( 1092175 )
      Hey Bruce (and everyone else), Thanks for the reply! In this particular situtaion we enterered into a very informal agreement (largely verbal) in an effort to expedite the start of development (and appease aq crunched development timeline). As a result there was no contract that made specific reference to ownership of the deliverable. In retrospect this would have been a worthwhile use of time! So all things being equal. If Party A agrees to pay party B for development of new/unique code - without any ment
      • Gulp. Don't do it this way again, OK?

        I'd say you have a right to own the copyright, and there is even a chance that work-for-hire applies, dispite the narrowness of work-for-hire in the copyright title that others have pointed out. But I'm not the judge, or even a lawyer.

        Bruce

      • I run a software development house and we used to get into this kind of sticky situation from the other end a few times many years ago, until we explicitly stated in all proposals who would own the end product, whether it was a license etc etc.

        The default years ago used to be that if the ownership question was not addressed it would belong to the development house. Nowadays it's not so clear, and can go either way in court. You pays your money and takes your chance.

        My $0.02-worth is this - I think it's

    • Speaking as a jobbing developer, I normally retain copyright in what I do; this is, in any case, the default position by law in Europe unless the contract explicitly states otherwise. I usually then publish the software under the GNU General Public Licence. What the firm who commissioned the software get out of the deal is:

      • It's tailored to their needs
      • I will give them ongoing support (for money)
      • They've got the source code and the right to modify it if I go under a bus, or fall out with them

      Obviously,

  • Expected protocol is to have your lawyer specify what you want in the contract before any work is done or money paid.

    If you didn't think/plan ahead, take whatever you can get.

    Sorry if that sounds rude, but I spend most of my day dealing with other people not thinking/planning ahead and then expecting somebody else (i.e. me) to bail them out. It gets old.
  • In either case you can do with it as you like. But you should have specified that before the work started. Try to get to one of these two alternatives now, but it might take legal action (and help).
  • <IANAL>
    If the contract says nothing about who owns the code, it may probably be treated as a work-for-hire, which would mean you owned it.  OTOH, if they assert copyright and you don't fight it, you probably won't be entitled to list it as a company asset.  Contact your attorney.
    </IANAL>

    • Re: (Score:2)

      by panda ( 10044 )
      IANAL, but I thought that things were generally just the opposite on contracts. Unless the contract explicitly says that the resulting product is a work for hire, then the person doing the contract work owns the code and not the other way around. I'm pretty sure it works that way for graphic arts, written copy, etc., so software should not be any different.

      • Re: (Score:2)

        by Skreems ( 598317 )
        This is probably completely legally unsound, but wouldn't it make a difference as to what they were contracted to do? I.E. "we want to buy some software that does x, y, and z from you" as opposed to, "we want to pay you to build for us this software which does x, y, and z".

    • If the contract says nothing about who owns the code, it may probably be treated as a work-for-hire . . .

      False. If the company that wrote the code wasn't an "employee" of the contracting company (either actual or de facto, per the 12 non-exclusive, non-singly-determinative factors in Restatement of Agency 2d 220 (applied in a copyright context by SCOTUS in COMMUNITY FOR CREATIVE NON-VIOLENCE v. REID, 490 U.S. 730 (1989), http://caselaw.lp.findlaw.com/scripts/getcase.pl?c ourt=US&vol=490&invol= [findlaw.com]

  • If it was, and the developers are misreading it, have your purchasing department and/or counsel disabuse them of that notion immediately and forcefully.

    If it was, and they are reading it correctly, have your purchasing department and/or counsel taken outside and spanked hard.

    If it was not addressed, have said purchasing department and/or consel taken outside and shot immediately, and then hire competent counsel to get you out of the mess.
  • What are the exact terms of the exclusive license? Is it a license non-exclusive, royalty-free, irrevokable, perpetual license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display the software?

  • Say byte me... (Score:1, Insightful)

    by Eric Pierce ( 636318 )
    Let us know who they are so we make sure to never, ever contract them.
  • Why they claim a "permanent and exclusive" license rather than just giving you the software. If the license is permanent, you have it forever, and if it's exclusive, they can't use or sell it. Unless I'm missing something, they are just being pricks and that's not a very good corporate culture for a consulting house.
    • I suspect that "exclusive" refers to the use of the software; i.e. you may use this forever, but only for yourself/your company; i.e. you cannot give/sell this to anyone else; i.e. the consulting firm retains the right of selling the software to others themselves.

    • Re: (Score:2, Informative)

      by IcyWolfy ( 514669 )
      As one of the contract negotiators for a software development house, there is a big difference between permanent exclusive, and transfer.

      A permanent exclusive license states that you have the right to use the code indefinitely. And (in our contracts anyhow) state that you also have the right to modify, and reuse the code in other internal projects. This is the cheaper option for the client, as it means the development house can also do the same -- create derivatives, alter and reuse the components in ot

      • My local engineering association recommends only giving out licenses for all engineering works. The reasons are fairly obvious. Firstly, you can design a building (or a software program) for a client to use, without owning all the copyrights associated with it. For instance, suppose the consulting company used some example source code from Microsoft in the production code. They are allowed to do that. They aren't allowed to give the client the copyrights to Microsoft's example source code. It doesn't

    • Re: (Score:3, Informative)

      by vux984 ( 928602 )
      Unless I'm missing something...

      First off, its historically very common in photography. And usually represents an arrangment where the the photographer agrees not to resell a photo to any other customer, but the buyer can't go and start reselling it either, except for maybe a one-time transfer where the buyer transfers the permanent/exclusive/transfer license that they have to another 3rd party.

      The idea is that if you were buying a photo to resell, the photographer would probably want a royalty component. Bu

  • What does the license include? (Score:4, Informative)

    by tepples ( 727027 ) <tepplesNO@SPAMgmail.com> on Thursday April 26, 2007 @02:35PM (#18888607) Homepage Journal
    There isn't much of a difference between a copyright assignment and an exclusive license. But exclusive licenses may have some gotchas that may affect your situation. Before you go on the clock with an attorney, you'll want to familiarize yourself with the text of the license and see which of the following apply:
    1. Does the license include the right to prepare derivative works? If so, then you can continue to maintain the code.
    2. Does the license include the right to sub-license the work? If not, the development studio probably excluded sub-licenses in order to keep you from selling copies and competing with the studio.
    3. Is the license perpetual? If not, then you have a rental.
    • Owning the exclusive right to vend the software probably increases its value as an asset. If the development company isn't assigning the copyright, they probably aren't giving that, either, and plan to leverage upon this software with other customers. This is a game that most contracting developers play.

      Bruce

      • Re:What does the license include? (Score:4, Insightful)

        by rossifer ( 581396 ) on Thursday April 26, 2007 @03:46PM (#18889889) Journal

        If the development company isn't assigning the copyright, they probably aren't giving that, either, and plan to leverage upon this software with other customers. This is a game that most contracting developers play.
        Of course, the licensing of code used in a contract is more sophisticated than you're letting on, so it's more serious than a game.

        When I've done contract software development in the past, I've brought a common library of foundation code that gets me started very quickly. I wrote this library after completing projects for two clients and realizing that I started each project with the same two months worth of work. So in the next downtime, I wrote a more flexible/reusable version based on lessons learned.

        I'm perfectly happy to license this code to my clients and allow them to maintain it themselves once I'm out of the picture, but I don't want to lose the ability to use that library for the benefit of my next client.

        IMHO, the best option is to negotiate the licensing terms of all of the parts of the project up front and in good faith. This means being clear that the contractor is bringing code written elsewhere to the project and wants to retain ownership of that code. This means being clear that code written specifically for this client (embodying confidential and domain-specific knowledge) will not be owned or re-used by the contractor. This also means being crystal clean about billing of time spent maintaining the outside library (*). There are a few ways to clearly differentiate between the three kinds of time. I find that a "domain-specific" test is generally enough to leave both parties satisfied that their interests will be protected.

        * If we expect significant expansion of the non-domain-specific code I've brought, I'll ask for a lower rate when working on that part of the system. Otherwise, if the maintenance take more than an hour in a week, I'll eat the time, less than an hour in a week and I'll bill the time. This has usually been acceptable to my clients and acknowledges that we both benefit from that time.

        Playing games just means a lot of hard feelings, a lost reference, no assistance maintaining the project, and nobody is happy at the end of the day. Be clear, be honest, and negotiate from shared goals instead of trying to screw every penny or minute of time from the other.

        Ross

    • Re: (Score:2)

      by cei ( 107343 )
      There isn't much of a difference between a copyright assignment and an exclusive license.

      Well, theoretically copyrights still expire eventually. The H.G. Wells novel War of the Worlds is in the public domain. However at some point in the 1950's Wells' estate gave exclusive license to Paramount for film rights. That exclusive right was held up in court just a five years ago when Hallmark Entertainment wanted to do a War of the Worlds film of their own and Paramount shut them down. Seems like, at least in tha

      • Re: (Score:1)

        by tepples ( 727027 )

        Well, theoretically copyrights still expire eventually.

        Well, theoretically the war in the Middle East can end eventually. But until it happens, I'm not holding my breath, as greed cuses both resource wars and a succession of Bono Acts.

        Seems like, at least in that case, contract law trumped expiration of copyright!

        For one thing, trademarks on the title of a work do not expire. For another, foreign copyright in the works of H. G. Wells had not expired and as of 2007 still has not expired in Europe

  • Not enough information. (Score:5, Insightful)

    by amper ( 33785 ) * on Thursday April 26, 2007 @02:37PM (#18888631) Journal
    You didn't specify the terms of the license agreement. It's great that it's permanent and exclusive, but if you want the copyright transferred to your company, be prepared to pay for that privilege. This is a fairly common practice.

    In increasing order of expected value:

    1. Temporary, non-exclusive right
    2. Permanent, non-exclusive right or temporary, exclusive right
    3. Permanent, exclusive right
    4. Copyright transfer

    The author has the right to expect greater compensation for greater value delivered. Perhaps you should try to negotiate a transfer agreement before you get too up in arms about this matter.

    • Re: (Score:2)

      by eric76 ( 679787 )
      A developer writing software for a company who would have full copyrights to the finished product would need to write everything from scratch.

      He would not be able to use pieces of code he wrote elsewhere because of two reasons. First, he would have to give up ownership of the code. But that brings up the second, thornier problem -- if he had already used that code in a project for someone else, there might be potential serious license problems for his earlier customers.

      If I hired a developer to write some

  • As a feelancer (Score:4, Informative)

    by miyako ( 632510 ) <miyako AT gmail DOT com> on Thursday April 26, 2007 @02:43PM (#18888785) Homepage Journal
    IANAL but... From the perspective of someone who has done a lot of freelance work, both development and graphic design, retaining copyright is not unheard of, but it sounds like someone screwed up in the negotiation process. When doing freelance work, it's common to retain copyright, even when offering an exclusive license, because it allows the developer to create derivative works. This allows the freelancer to re-use code modules in other projects without having to worry about being sued by clients. From the perspective of a business, this doesn't necessarily hurt you. Depending on how your license is written, you may still have the right to modify the source for your use internally. You'll really need to get a lawyer to work out the details of your rights.
    Whenever I have done freelance work, I have always stated up front where I stand on retaining copyright. In general, I retain copyright for projects unless stated otherwise - but I let the client know that upfront and that it is open to negotiation (in general, I charge the lowest rate for clients who want a non-exclusive license, more for clients who want an exclusive license where I retain copyright so I can use modules in future projects, and the most for transfer of copyright).
    As for work for hire, as a rule of thumb, a project is work-for-hire if the project is created using company resources, so if the contractor used your companies computers and office space, then it could reasonably be considered work for hire, whereas if you gave them specs and they came back with a disk, it might be harder to make the work-for-hire argument. Once again, you'll have to talk to a lawyer about that, since there are all kinds of subtleties and differences from state to state, country to country, etc.
    I would say, get a lawyer and try to work out your situation in this instance, and consider that you may have to chalk up a lesson learned. In the future, discuss this with contractors before hiring them.

    • Re: (Score:3, Insightful)

      by Skjellifetti ( 561341 )
      IANAL but...

      That's obvious. The relevant law:

      Works Made for Hire. -- (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrument signe

      • Re: (Score:3, Insightful)

        by cpt kangarooski ( 3773 )
        They hired a company to do the work for them, not an individual so 1) does not apply.

        Whether it's a company or not doesn't matter. 1 can apply, but it's very dependent on the details involved.
  • 1) Hire another company to invent time machine
    2) Send blueprints, code, and a completed time machine, and source code for existing project, back in time
    3) ???
    4) PROFIT!!!
    • Unfortunately, the way it's more likely to work is:

      1) Hire another company to invent time machine
      2) Send blueprints, code, a completed time machine, and source code for existing project back in time
      3) Get all of the above siezed for violating the patent on the time machine (Patent No. 1, issued the day the Patent Office opened -- when else would you be first-to-file with a time machine?)
      4) ???
      5) They PROFIT!!!

  • Maybe they didn't write all the code (Score:3, Interesting)

    by Maximum Prophet ( 716608 ) on Thursday April 26, 2007 @02:45PM (#18888817)
    Perhaps they bought a salable license to a library that they used to build the code they are selling you, thus they can't sell you a copyright they don't own. Double check that their coders wrote 100% of the code.
  • I suspect they just have that to keep your company from reselling the software. They would probably let you modify it as you wish.
  • This will probably only be an issue if your company tries to sell the code or release it.
    It should have no impact on internal use and maintenance.
    The contracting house may not exist in a few years anyway.

  • From the other end... (Score:3, Interesting)

    by itsdapead ( 734413 ) on Thursday April 26, 2007 @03:29PM (#18889581)

    So does anybody have a magic solution that gives the client the right to use the original work that they've paid for, without the developer having to give up the rights to every last generic utility class they wrote, and consequently having to clean-room their next project, lest the original client sells out to a litigation-only troll company?

    (Yes, but apart from that, Dr Stallman...)

    The amount of dilligence that can reasonably be expected from a developer rather depends on the length and scale of the project - if its a 5 year project to write a new operating system that's one thing, but if its just a 6-week website job the client can hardly expect to pwn your browser-sniffing code...

    • IANAL, but I believe it's called sharing the copyright as joint owners. Once both companies jointly own the copyright, either can do anything with the code it wishes except preventing the other from having that same freedom.

      Better yet for both the contract developers and the client, the developers could assign the copyright on the complete work to the client but retain copyright on the libraries. This could allow the client who paid for it to do whatever they want with the whole project. They'd have exclusi

    • Re: (Score:2)

      by Surt ( 22457 )
      Is a nonexclusive unlimited license not what you're asking for in some way?

      Client goes their own way, and does what they please with the code. Developer goes their own way and does what he pleases with the code.

      Afraid of the specific condition of the client selling to a litigation company? Make the source code part of the license non-transferable.

    • As being a former contract developer it's all in the contact negotiation. If you have a standard set of code that you use in your contracting assignment, you make it part of the contract that you use code that you have developed, you maintain the copyright to that code. The client gets non-exclusive a license to use and even modify you code, but only on conjunction with running and maintain the contracted software. You can even make the license transferable attached to the contacted softwared as an assset.

    • In the FLOSS arena, I've long been a fan of joint copyright assignment, such as the one used by Sun and OpenOffice.org [pdf] [openoffice.org]. I'm not sure if there are any potential pitfalls for doing this in the client-freelancer scenario. But, in theory, it gives both parties carte blanche to do what they want.

  • Non-exclusive license . . . (Score:3, Informative)

    by Dausha ( 546002 ) on Thursday April 26, 2007 @03:51PM (#18889963) Homepage
    This sort of thing happens enough among uneducated (legally speaking) developers and companies that there's a term for it---non-exclusive license of copyright---which is essentially a contract issue. This is an equitable issue (unjust enrichment) which falls under state law. The long and the short of is is that they cannot prevent your using it, redistributing it, or even selling it to another software house; but neither can you stop them.

    The normal rule is the author of the work owns the copyright. However, when the work is done by an employee for an employer, or when the contract explicitly transfers ownership, we typically have a work-for-hire. When the contract is silent and the author is not an employee, we can have a non-exclusive transfer of license. Since the author did the work and was compensated, then the compensating party has the right to use the property free of any license control. The _Foad_ case is a good example of this. (http://www.ivanhoffman.com/nightmare.html)

    The author cannot prevent you from using the software because you paid for its development. Heck, the author cannot prevent you from giving the software to a third party for them to improve it. Foad involved an architecture firm creating plans of a shopping mall for a contractor who sold the construction project to another contractor. The second contractor then gave the plans to its outsourced architecture firm who removed all references to the original firm and essentially copied it. The Ninth Circuit said the nature of the relationship between the original parties created a non-exclusive license which allowed for this. In law, this is grounded in equitable principles of quasi-contract or unjust enrichment. The court in _Foad_ split in two directions (2-1) on the underlying cause of the transfer, but were unified in the existence of the transfer.

    This is a state law issue because Congress implicitly ignores non-exclusive transfers, and the occurrence of these transfers is contractual in nature. Contracts are usually governed by state law.

    I think they can revoke the license; but only by paying you back all that you spent. When the grant is made "for compensation" (usually money), the grant is irrevocable. In two circuits, the revocation can only happen when the license is between 35 and 40 years old!

    Get thee to a good IP attorney and stop asking /. We are not lawyers, and this is not legal advice.

    As an aside, the Open-Gaming License put out by WOTC (Hasbro is it now) is a explicit non-exclusive license grant.

  • Who cares what they say, what does the contract say?

  • Unless the copyright issues are explicitly spelled out in the contract, two things are true:

    1. The development house owns the copyrights, not your company. Period.
    2. Your company has an implicit non-exclusive license to use, modify, improve and even sell the software if it can be done in a manner consistent with the purposes you discussed with while creating the contract. Note however that they would be entitled to a reasonable portion of the proceeds in any outright sale of the software.

    There are a few exc
  • IANAL, at first I though this might fall under Work For Hire:


    Works Made for Hire. -- (1) a work prepared by an employee within the scope of his or her employment; or (2) a work specially ordered or commissioned for use as a contribution to a collective work, as a part of a motion picture or other audiovisual work, as a translation, as a supplementary work, as a compilation, as an instructional text, as a test, as answer material for a test, or as an atlas, if the parties expressly agree in a written instrum
  • Get the terms of the agreement in writing before you pay anything. Duh.

    Verbal agreements, basic quotes, and general practice are one thing if you're talking about off-the-shelf stuff, but when somebody's doing custom work for you -- of any kind, whether it's software dev or landscaping or advertising or business consulting or whatever -- you want everything spelled out in black and white before you pay them a dime. Things you want spelled out include, but are not limited to, the following:
    * exactl

  • Are you really going to take advice on your IP from a Slashdot post?

    Perhaps I'll go ask my barber how to configure SSL on Apache? I'm sure he'll have some good advice.

  • Unless the software is created by employees of your company, or you agree up front that you will have copyright, the copyright goes to the developer as the author of the work. It's no different than you going to the store and buying Office 2007 off the shelf, and the same accounting rules apply.

    What I find more interesting is the licensing. You should have been told what the license would be before the work was begun. A permanent, exclusive license is the next best thing to owning the copyright, as they can

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