
Ask HN: How to retain IP as a software contractor - confiscate
I am sure a lot of folks ran into this scenario before, but searching for an answer online seemed hard due to all the noise, so hoping to see if anyone has personal experience on this<p>Q1.
If you were a software contractor working for a company on contract (say, to write a web site in html&#x2F;js&#x2F;css), by default, the IP is owned by the contractor&#x2F;author unless there&#x27;s a written agreement to transfer ownership. Is this correct?<p>Q2.
If you were the said contractor, and you wanted to retain ownership of your work after the contract is over, does that mean all you have to do is not sign any written transfer agreements? Would it be worth it to have some kind of extra written agreement to make it clear you as the contractor still retain IP after the contract ends?<p>Q3.
From the company&#x27;s point of view, it would be preferable to own the IP of the contractor. Under what circumstances, in the usual case, do they let the software contractor retain the IP? Seems like a lot to give up, given all the time&#x2F;money the company already spent to set up the contract job, look for contractors etc. Does this usually lead to a significant reduction in, say, price of the contract? What would usually convince companies to give up IP to contractors, or not care about IP after the contract ends?<p>Q4.
If you were the said contractor, after the contract, can you retain 100% ownership of the IP, and then provide a &quot;for eternity&quot; licence to the company, such that both you and the company can use the code at the end of the contract, but the company would own any modifications it makes after the contract, and you would own modifications you make. Essentially have the ownership be divided when the code gets &quot;forked&quot; when the contract terminates. Is this possible? Is there a canonical term for this type of arrangement?<p>Thanks
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jeffmould
First things first, IANAL. Assuming you are talking about building a website
for a client as a contractor, and the IP you refer to is the code behind the
website:

Q1: Most development contracts I have seen usually lay out that the code is
owned by the developer until final payment, or some other final agreed upon
milestone is reached, at which time the ownership transfers to the customer.

Q2: While not signing a "transfer agreement" sounds simple in theory, you are
going to be hard pressed to convince a customer to not take ownership of a
website or other application you were hired to develop for them. Why would I
hire you to build a website for me and then not want ownership of said code?
This is exactly why this question is asked by potential investors and exists
on directly on applications for programs like YC, "Was any of your code
written by someone who is not one of your founders? If so, how can you safely
use it? (Open source is ok of course.)"

Q3: Why as the contractor would you want to retain the IP? Are you looking to
resell to other companies? One option would be to build it for them under
contract and then come up with a lease or maintenance contract upon completion
of development. This may allow you to retain the IP while continuing to bill
them.

I think to answer your questions though it really depends on what you are
developing for the customer. If you are building a website for a company or
building a specific application than I can't see a reason the company would
want you to own the IP when you are done development. They hired you to
develop it for them to own.

Based on your questions it sounds like a company asked you to develop
something and you think it is a good idea and want to keep it for yourself so
you can resell it to other clients. If this is the case, it sounds like a
shady way to approach it. You may be better suited to build the software and
have the customer as your first client. But tell them that is your intention
from the get go. Another option would be to attempt to work out an arrangement
with them where you build it and they sell it, splitting revenues.

~~~
confiscate
Thanks for the advice.

Yes all these questions are aimed at finding a way to clarify
intentions/expectations for both sides from the get go, before the contract
starts.

~~~
jeffmould
No problem.

I would say that if the application is being used internally by the customer
(i.e. an accounting program or intranet site) you are going to have an easier
time. If the application is a product/service they are selling to their
customer, is a source of revenue, or is the marketing tool (i.e. their
website) you are going to fight an uphill battle to convince them to let you
keep the IP.

Regardless, I would be clear from the get go and if you are looking to retain
ownership I would make sure it is spelled out clearly who owns what. You may
even consider a nuclear type option where they have a buyout right down the
road if you do retain ownership. Either way, I would consult an attorney
before signing anything.

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gesman
Specify in an agreement that: \- it is _not work for hire_

\- you own IP

\- client gets non-exclusive license to use IP without rights to sub-license,
sell or transfer the license.

I was pretty successful to actually ask client if he wants to own IP or not.
No - ok!

Yes - ok - for the double price of engagement.

Everyone is happy.

~~~
confiscate
that's very helpful gesman. Thank you

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ilaksh
The contracts I have seen pretty much all say 'work for hire' and assign the
IP to the client who is paying. Actually sometimes they try to go further and
say they own everything you do while contracted with them.

Most of my jobs have essentially been startups where I was the tech co-
founder, except not recognized as such, rather hired as a cheap code monkey.
Those gigs are just much easier to get. Sucky and mostly a waste of time, but
pays for food and rent.

Anyway I don't think anyone will share ownership of IP unless they are
clueless or looking for a co-founder.

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MichaelCrawford
You cannot lose your copyright other than by your signed agreement. But look
out for the term "work for hire". That specifies the company owns your work.

If you are a regular employee then the company owns your work. In the US the
determination of whether you are a consultant or employee is determined by the
"twenty factors", also known as the "twntry questions".

