contract work code ownership question

[jankoM]

hi,

I have one question. When a programmer is coding (makes some application from start to finish) for some company X for payment (I think you call this "contract work"). Can he then use his code any way he wishes to (because he is the author) or does the company that paid him "own" the code and he can't.

Concrete example. I am making some domain specific (plumbing) 2D CAD application for some company. After I deliver them the product they ordered, can I keep developing on that codebase and make some more general or different domain specific CAD application out of it?

I know my case is not game related, but I know many of you do contract work for games where this question is also important.

I do contract programming for many years and I always considered me as the owner of the code (which also seems the most logical) and nobody cared also - but now things are more serious and I need to know how thing really stand.

Thanks,
Janko

[ggambett]

I think it would be better for you to negotiate that and have very clear language in the contract which clarifies who owns the code.

[Red27]

The IP (Intellectual Property) to any code you produce under a contract is nearly always owned by the company (clauses would state this). It would need to be expressly stipulated otherwise. Check your contract wording.

[spellcaster]

It depends. If they ordered the product (and just that) they get it and it's fine. If they bought you, the code belongs to them.

But the good news is: Just look at the contract. It should state exactly what the company paid for, and what rights the company bought.

When in doubt, get real legal advice.

[sillytuna]

Seconded.

You should always have a contract which stipulates precise ownership of code and tools, including re-use by both you and your client, and sometimes exclusivity clauses (e.g. CAD code cannot be used for any other CAD clients).

You also need to ensure that core code that you use across projects is exempted from certain limitations.

While you are assuming code is yours, I can bet that your client assumes they own it. If we sub-contract programming out, the code is ours and ours only unless there is a good reason for it not to be. Core developer stock is exempted of course. The same goes for when we sub-contract.

Your contract should also make clear that the code is not owned unless the contract has been followed through in full - i.e. invoices paid!

[You can also license code rather than "sell" it, e.g. license tools related to your code for use exclusively for a particular product or project and for no others].

[jankoM]

huh... where to start...

I don't want to negotiate and get a lower price for something that might already be mine.

What Spellcaster said...I think some difference is ... are they paying you to bring them the product, or are they paying you to write code (for them). In my case it's ussually the product.

contract... contract... Well, I never made any contracts. I give them the offer with exact specification of what the product will have and the price. They give me 30% in advance (so I am secured) and the rest after I deliver (so they are secured).

Of course I respect common sense. I am making tradeportal that will have all this specific features. It would be very evil and stupid of me if I sold that thing to anyone else after I am done. But it would also be very stupid of me to not reuse but write from the start all general libraries and tools that I made when I was making that portal (I also used tons of my pre-written libs for that portal and I can't just loose them because I used them there).

[soniCron]

Whenever I make a game for a client, I non-exclusively licence to them my home-rolled game framework (or web framework if I'm designing a site) and they own any domain-specific utilization of that framework. This is usually good for all parties involved because I retain ownership of the underlying utility functions and classes and they get a unique product at a much more affordable price.

It should be noted, however, that it must be specifically stated in the contract that they are licencing the framework (including all licencing details -- in my case, an MIT-style license) separate from the game code. This absolves confusion, should any problems arise.

[jankoM]

I was writting last post before sillytuna replied.

Aha... I am getting the picture now. So the answer lies in *contract*, negotiation and lawyers... but do you really go through all this birocracy? How big projects are we talking about?

I am too cheap that all this would be possible. If I double my prices I can get a lawyer and time to write contracts :) but now I rather hurry with the code.

While you are assuming code is yours, I can bet that your client assumes they own it.

yes this is true.

//EDIT:

And this before soniCron replied... damn I am slow...

Ok... this is all very good info and it is starting to makes sense... Thanks a lot so far!!!

[sillytuna]

Pre-made libs and tools are a different thing so that should be covered by contracts.

You really must have Terms and Conditions / Conditions of Sale [basically a very simplified contract].

If you are selling a finished product that's one thing.

If you are writing a product on spec, that's something else. If they want source code to that product and you wouldn't normally do that in your line of business, charge a premium.

You should *never* be restricted from using your core framework, with the exception being someone paying lots of money for exclusivity.

Does that help?

[soniCron]

So the answer lies in *contract*, negotiation and lawyers... but do you really go through all this birocracy? How big projects are we talking about? Yes, absolutely! It (in part) protects both parties from a nasty legal battle should any confusion arise. However, if you are capable of understanding the contract, then there is usually no need for a lawyer, although it's important to consult one if there are any questions.

Size of project? Anywhere from $120 and up! ;) Anything less, and that's less than an hour's work, anyway! I'm usually willing to zip through the initiation process that could take longer than the project itself in order to expedite the process -- the risk of losing an hour of my life is trivial. Additionally, I might forgo the formalities on smaller projects if I've worked with the client on several different projects, or if we have become friendly. But for all intents and purposes, I like to keep things in strict, clear writing. It's much cheaper to point to a clause in the contract than drag each other down to a courtroom! :)

However, I always make it clear who owns what when the project is complete. This is vital, contract or not!

[jankoM]

Yes you all helped a lot! I was having this question in my head for a very LOOONG time. Now that the question can be removed and it freed some space "up there" I am also hoping on some better performance. Great!

[Omega]

I'm not sure how this information would apply to you since you're not American, but it might help if your clients are from the U.S. of A. Also, I'm not a lawyer :P

I read in a library book that by default, a contractor owns the copyright of anything he or she creates. As you know, whoever owns the copyright, can do whatever they want with the design/art/software/code/video/music/performance/book.

He or she has to assign the copyright to their client, in writing, and sign it. In that case, the client will now own the copyright and can resell, modify, or create derivates of your product. You will now no longer own the copyright.

Sillytuna touched upon this. In the contract, you should specify if they are getting an exclusive (you will not give or sell the work you created for them, to another client or your own self), or non-exclusive (they can use it, and you also can re-sell or re-use that logo or design in another project for another client.) So, if you are developing a shopping web site, you could give them an exclusive use of the design, but you would specify that osCommerce (or any third-party software) cannot be made exclusive to them because you don't have rights to that.

You can also give limited rights (where you specify that they can only use it for a certain domain name, certain company, etc, and not re-sell it) or unlimited rights (they can re-sell your creation, or give it away for free, etc.)

So, you have exclusive limited rights, non-exclusive limited rights, exclusive unlimited rights, non-exclusive unlimited rights.

Now, it sounds like if you hadn't assigned the copyright to your client (I bet most people forget this step), and you don't have a contact, you still have full rights to it.

It actually also means that your client has no copyright to the design whatsoever, since he's not your employer. He just had you do a service. I think a court would probably rule that the client can still use your stuff even though you forgot to transfer the copyright. (Which is fine of course since they paid for it.) But it also means that you are the one who actually still owns the copyright, since you created it, and the other party has no record of any copyright transfer. In fact, you don't even have a contract so who knows what you did for them... maybe you just changed the hyperlink colors on their web site and all they have is a paystub to you in the amount of $1,000. Who knows what you even did? Both parties should do a contract. It's to make both parties happy, not trick your client.

I hope you enjoyed this legal lesson because I AM NOT A LAWYER WHATSOEVER! And, that book only brushed upon US Law (British, Canadian, and Australian laws are surely different.) However, that will still be $200.

[jankoM]

Thanks Omega a lot. Yes thats what I was asking... what is the default value... I have to know the default... to say it very simple "do they pay me big bucks so they can gave the code ownership" or "do I do the job almost for free because I want to retain code ownership". I will also look at laws of my country and EU about this as you did about US.

I would pay you $200 but sorry... we didn't have no contract ;) .. as you see upthere I work strictly by contracts :)

thanks,
Janko

[woo]

An addendum to the lawyerly lesson (down with lawyers!)... is that you have to carefully consider if the code was written under a "Work for hire" arrangement. There's a good article for U.S. folks here: http://www.copyright.gov/circs/circ09.pdf

Basically, you have to determine if it falls under a work for hire arrangement because if it does, than the owner of the copyright (by default) is the "employer" not the "employee", where the definition of employer and employee are loosely defined and could conceivably cover a contract relationship.

Hope that helps.
-Andrew Douglas
http://theoreticalgames.com

[jankoM]

AHA! :)

Picture is much sharper and clearer now with all that you said together! Thanks woo too:)