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Who owns what - Code versus Concept

A client is attempting to take total ownership

     
7:56 pm on Dec 18, 2003 (gmt 0)

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A client approaches me with an idea for a website along with a schematic map of what the site requires.

In my own terms I state that underlying code and functionality remains my property except where elements are public domain or attributed to other programmers.

The client argues that there would be no functionality without his original idea so the site is therefore jointly owned - including code and functionality.

How does one separate the two without there being grey areas? Yes the concept may be his but how do I retain my rights here. After all, I have to sit down and convert his ideas into a working model and the last thing I need is for him to replicate it or sell it on. Anyone else hit this problem?

8:03 pm on Dec 18, 2003 (gmt 0)

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This is something that you need a contract to deal with.

As a compay, when we hire an individual to do work for us, we make sure there is a contract that we own the rights to the work once it's completed, as we paid that individual for their time and expertise - and don't want any future issues with someone claiming ownership of something we paid for.

As an individual, when I go into work for someone, I make sure that there is a contract stating what rights, if any, I want from the project, in case there is something I'll develop that I'll want to use again.

Sometimes an agreement can't be reached, and you are best to walk away.

FYI - Here's an article that explains a bit about this:
ht*p://www.bitlaw.com/copyright/ownership.html#software

The latest findings from what I understand are that webpages are currently being considered software as they are coded to run in a browser - although, that could change in the future.

8:06 pm on Dec 18, 2003 (gmt 0)

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Hello,

If you get financially compensated for your work, what's the problem with him reselling it afterwards?

Normally, I think the client owns the code once the money lands in your bank account.

Hope I helped.
//ZS

8:19 pm on Dec 18, 2003 (gmt 0)

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Thanks Ewhisper - very helpful. Ziggystardust, yes i see your point but almost every webdesigner I know has a clause that says "we own the code". If the client seeks total ownership thats fine but as Ewhisper says, you really need a legally binding contract and a full evaluation of who owns what plus a value placed on it. Given that code is all based on machine code and therefore probably attributed to thousands of programmers, its quite hard to say for sure WHO owns what. It isn't as easy as it first appears.

Ford may own the copyright on the Ford Escort but do they own copyright on the pneumatic tyre, the combustion engine? Its far from simple.

8:28 pm on Dec 18, 2003 (gmt 0)

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Ford may own the copyright on the Ford Escort but do they own copyright on the pneumatic tyre, the combustion engine?

You're confusing copyright with patent.

8:43 pm on Dec 18, 2003 (gmt 0)

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I should add, that as a company, if we are having a custom designed program or something made, which we will own 100% after it's done, we will often raise the compensation made to the programmer slightly. Mostly for two reasons.

1. We want a working relationship with the designer for any future specific changes which they could implement easier than someone working to understand the program.

2. If we found them good enough to work for us in the 1st place, we will probably contract with them again, and will get a bit of priority because they were well compensated and treated fairly in the first place.

In addition, remember, if they want changes to a finalized product to be made in the future, that should be stated if it's in the contract, or if that will be a seperate negotiation.

Many companies expect free or cheap changes to a product - make sure that's worth your time before entering into an agreement.

8:47 pm on Dec 18, 2003 (gmt 0)

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Well yes - I probably am, but you see what I'm driving at:)

If you build a complex site, in essence its an application. In most cases there is just the one site and I have no problem with that. The problem comes when he clones 100s of them or sells it as a boxed product.

According to the link Ewhisper gave me, you either say its 'for hire' or else negotiate a price and draw up a contract that allows the client to do as he wishes - in which case the final price is obviously higher.

On that basis I can only stick with the "we own the code" clause. Its a tight profit margin on the contract and this small point is using up time. Maybe its a case of saying "Look lets forget the idea".

9:02 pm on Dec 18, 2003 (gmt 0)

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If you have reason to believe that the client intends to re-sell your work, then draw up a contract that includes royalties or defines a fixed percentage split of ownership on copies beyond the original (which you sell to him).

Jim

9:36 pm on Dec 18, 2003 (gmt 0)

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And, if the client owns the code after the completed project, there needs to be a clause stating that it doesn't prevent you from developing the same functionality again, for yourself or someone else.

You had the expertise to build it once, so you should be allowed to build it again.

9:40 pm on Dec 18, 2003 (gmt 0)

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The client argues that there would be no functionality without his original idea so the site is therefore jointly owned - including code and functionality.

IANAL. However as I understand it in the US the issue of ownership would have to be determined by contract. Unless there is a patent on the idea it doesn't matter that the client had the original idea. You can't copywrite an idea.

As an example say I have an idea for a new way of swinging on a swing and I tell my friend Fred. Now Fred goes to the local playground and tries it out; in effect using my idea. Even though it is my idea it does not mean that Fred now owes me a fee for using that idea. However, if I had patented my idea, as a Mr. Steven Olson has for inventing a method for swinging sideways on a swing(patent #6,368,227), I would be able to charge Fred for swinging, if I wanted to do so.

Although, now that I think about it, I'm not sure where the provisions of a "work for hire" would come into this.

9:45 pm on Dec 18, 2003 (gmt 0)

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Now that I just looked in the library, the following may be helpfull.

[webmasterworld.com...]

3:40 am on Dec 19, 2003 (gmt 0)

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some of the articles here may help as well to clarify the who-what questions:

[ivanhoffman.com...]

5:47 am on Dec 19, 2003 (gmt 0)

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bcolflesh

>>You're confusing copyright with patent.<<

You’re getting copyright, and trademark confused. Ford and Escort are trademarks, which are stronger than copyrights. And a patent could have something to do with it if one filed and the idea is unique enough to get one. I have filed my own copyrights and have been the witness for Motorola patents.

jdMorgan is right. You find out up front what the deal is. Since about 1985 I have at least 2 people a year tell me that they have an idea that is the best idea since sliced bread and want me to code it for a percentage of the profits. I always tell them the same thing. You keep all the profits and I get my coding fees upfront.

I’m not even convinced that an entire web site is a ‘program’ unless it uses PHP or PERL, etc. for literally every output. In every programming book I have ever read, a program requires 3 things, input, output and loops. It could be a work of art easily though, but that would be a copyright. You should go to The Library of Congress [loc.gov...] for additional information on copyrights and ownership. The form you fill out to file for a copyright is very specific about ownership and whom the work was done for.

The_Hitcher, my bet is without a contract stating you own the work, you are out of luck.

7:38 am on Dec 19, 2003 (gmt 0)

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>Anyone else hit this problem?

One of my clients came up with a good idea for a product which they required. I quoted for the web based product and they couldn't afford it.

I agreed with the client, followed up with a contract, that we would provide the product to them at a large discount (a price they could afford) and in return we would retain total ownership, marketing & intellectual rights to the product. Thereby allowing us to resell the product to similar companies and make a profit from the venture.

A lot depends upon the client. In this instance they have been a client for several years and we have a mutual "trust" of each other. However, we still both wanted the relationship in contractual form. Something I recommend to anyone getting involved in anything where ownership or marketing rights may ever be questioned.....which is just about everything ;)

2:32 pm on Dec 19, 2003 (gmt 0)

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jim_w

You're getting confused - I'm referring to The_Hitchers example of copyright on the pneumatic tyre and the combustion engine, which are patented items - please read the message.

2:40 pm on Dec 19, 2003 (gmt 0)

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bcolflesh – opps, your right – I’m sorry. I’ll edit that out! Sped Reding again ;-)

Except, right now my edit message button doesn’t seem to be visible.

7:41 pm on Dec 27, 2003 (gmt 0)

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my take ,and I am a web developer, is that if someone's paying for my work - then they own it. Can they resell it? I'd say so after all, if they get sued for their use of the product, will you also be liable for it?

On a semi ridiculous analogy - when you build a website for a client - say, a simple 3 pager. What would your take be if he had a friend to whom he sold a copy of the site as a template, and with minor tweaks in the header and copy, that friend set up his own site?

On the other side, there's of course the cases of software packages. Buying Office does not give you reselling rights. But I don't think contract work falls under that category.
Of course, if you know your client's intention is to resell the product, you may quote him accordingly, or establish royalties. But even as you quote him, the simple fact is that technology implementation can always be bought elsewhere.

What's your client's name and contact info?:)

11:46 am on Dec 28, 2003 (gmt 0)

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Thanks all. Some digression on patents and copyright, but essentially I think I got an answer. I guess for a simple three page site, ownership is not an issue. The complication comes when you build something on a much bigger scale (as in this case)with a comprehensive database that as far as I can see is a unique project and I can see it doing very well indeed. In this business we try to be competitive on the basis that theres always a 'Jim' somewhere who can do it cheaper. If you can see the project having the potential for replication and/or resale, you really have to set out a contract and add these costs in.

To put it in context, in this particular case I seemed to be investigating the legalities involved for several days before we even reached the point of deposits and final agreement and however you look at it, this is all valuable time - and unpaid at that. Therefore it seems fair to include a general clause on copyright ownership if only to stop this kind of thing. The buck stops here. If one feels its ok to lift such a clause then fine, but if you look around, most webdesigners have such a clause and for good reasons.........

2:48 pm on Dec 28, 2003 (gmt 0)

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I guess for a simple three page site, ownership is not an issue. The complication comes when you build something on a much bigger scale (as in this case)with a comprehensive database that as far as I can see is a unique project and I can see it doing very well indeed.

my 2 cents *s*

3 pages or 30,000 pages, its all relative. the quantity does not determine the ownership or the gray areas of ownership. there are many if-else statements in the legalities, but certainly a written statement upfront helps to sort it out. when you can, read back over the urls posted in this thread.

In this business we try to be competitive on the basis that theres always a 'Jim' somewhere who can do it cheaper.

amen. and janes too.

3:45 pm on Dec 28, 2003 (gmt 0)

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In my experience the IP of the product/solution is usually owned by one party - the client, though you may recieve IP royaltys - it doesnt give you rights to reuse it.

Theres only one way IMO, agree it up front with detailed contract termsand get paid accordingly. Suggest terms, modify terms etc until you reach agreement.

If the code is really so inovative, patent it beforehand :)

4:10 pm on Dec 28, 2003 (gmt 0)

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eWhisper is right on with the need for a contract.

My contracts always specify that markup, code and copy developed by me belong to me and that the client is given rights to their use.

When you buy software, you buy the right to use the software only. Some programmer was paid once, but the company gets paid over and over and over.

I'd rather be the company.

WBF

10:27 pm on Dec 29, 2003 (gmt 0)

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I agree with Willy. In my contract it states that I own the master files (psd, etc) and they own whatever is uploaded on their server.