Software Development: Should You License Your Code?

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When you’re working on software development projects for your clients, how do you handle intellectual property? This issue is particularly important if you plan to recycle code on future projects for other clients. After all, why should you have to reinvent the wheel for each new client?

Unfortunately, many software development agreements are silent with respect to intellectual property ownership.

This means both client and developer often end a project with both thinking they own rights to the code. But if it isn’t in the contract, do you really know?

And where there’s confusion about software rights, there’s often expensive lawsuits that could easily have been avoided.

Before taking on an app development project, be sure you know what you and the client will both own at the end of it.

An experienced software lawyer can craft an agreement that makes sense for both you and the client. In some cases, you’ll own the code but license it to the client under certain terms and conditions. In other instances, it may make more sense for the client to own the code to license back rights for you to recycle it on future projects with some limitations (e.g., no using the code for a competitor’s software app).

Of course, when dealing with intellectual property ownership when it comes to code, you have to take into account both open source code and public domain code that’s been used in the development. The software development contract can address these too so that neither you nor the client is confused as to who owns what rights.

How Narrow Should Your Software License Scope Be?

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Software License Scope: How Broad Or Narrow Should It Be?One of the most common areas of disagreement in software development (customer and developer) and app sales (app owner and purchaser) is the software license scope.

Now if you’re granting the license (the licensor), you want the license to be narrowly tailored so that the recipient’s rights are minimized. On the flip side, if you’re receiving a license (the licensee), you want to get as many rights as possible.

Unfortunately, both licensors and licensees rarely think this through prior to app development or the sale of a software license. The consequence of this lack of attention to an important detail is that neither party understands who owns what and can do what with the application.

Just leaving it to the lawyers to figure out is punting on the responsibility to identify what you actually want (and don’t want) out of a software licensing deal.

So, what’s the solution?

New App License

If a license hasn’t been issued yet, set your goals for the software license.

  • What are you trying to accomplish with the app license?
  • What are you trying to avoid?
  • What rights do you want to have?
  • What rights should the other party have?
  • What should the other party not be able to do after the license is granted?
  • What should you not be able to do because of the license’s restrictions?

And once you’ve answered these questions, it’s time to get an experienced software lawyer involved. Explain to him what you want to accomplish and then let him put it into legalese that meets your goals and legally protects you too. This draft software licensing agreement is the starting point for getting what you want.

Changing An Existing Software License Scope

What if a license has already been issued but one or both parties is unhappy with the status quo?

Identify the points of contention between licensor and licensee.

Then discuss these issues with an experienced software attorney who can advise you how to resolve them.

Now if you need help with the scope of a new or existing software license, consider booking a phone consultation with Software Lawyer Mike Young.

Software Development Agreements And Problems That Arise After A Project Is Done

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software developmentAfter you completed a software development project, very often you’ll discover that there are issues that remain unresolved, whether you’re the developer or the client who retained the developer for this project. That’s because software development agreements often have holes in them.

Here are some common app issues that need to be addressed, ideally within the software development agreement, so that you can avoid misunderstandings and even lawsuits after the project is completed.

Intellectual Property Ownership

First, who owns the application’s intellectual property?

Does the developer own the code? Does the client own the code?

Did the developer borrow code, such as open-source code or public domain code, and incorporate it into the project?

Was other third-party code licensed and used within the project?

Your software development contract should clearly identify what’s being used and who owns what.

Protect yourself as app developer or client so that there are no mistakes and misunderstandings.

Software Support

What about software support after development?

Is the developer obligated to provide any support whatsoever? If not, who will provide the support when it’s needed?

App Maintenance

Who maintains the software after the project is over? Will the developer do it or a third party?

Is it included in the development contract? And if it is, will the application developer be paid an additional fee (e.g. on an ongoing basis) in order to maintain the software application?

Software Development Agreements and Upgrades

At some point, the software that’s been developed will need to be upgraded to future versions, perhaps with even additional features and bugs fixed.

Is that included within the software development agreement? Is it even addressed?

Is there any duty whatsoever for the developer to come back, perhaps for a certain amount of money, in order to make upgrades?

If so, for what period of time is the developer obligated? 90 days? Six months? One year?

If you don’t know the answers to these questions and they’ve not been answered within your software development agreement, it’s time to sit down with the other party after speaking with an experienced software lawyer and iron out these issues with a supplemental agreement.

Can You Answer These Questions About Your Software License Agreement?

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software license agreementWhether you’re the licensor or the licensee, too often you have no real idea what exactly are your rights and responsibilities under a software license agreement.

For example, do you know what rights were sold as part of the license? Could the licensee turn around and sell one or more copies of the software application to someone else? Is the license sub-licensable?

Is your software license revocable or irrevocable? And if it’s revocable, what events trigger revocation?

Does the licensor have ownership of any code? For example, did the developer use open source code or public domain code?

If so, how were those handled as part of the license agreement?

Because if you don’t know the answers to these questions, chances are you have no idea as to what you actually own, including what rights you have under the agreement.

Related Article: How to License a Software Application

How do you enforce the software license as licensor or licensee?

Whether it’s piracy, or some other issue, what mechanisms are in place within the software license that provides enforceability in order to protect your legal rights?

An experienced software lawyer can help make sure that you have the right software license agreement in place. Don’t assume that you have rights without actually knowing what’s in your license. Because you may be unpleasantly surprised to discover what you thought you had doesn’t exist.

Software Code: Who Owns It?

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software code development and ownershipWhether you’re a developer or a business owner who pays for applications to be developed, it’s important to know who owns the software code.

Many software development agreements don’t properly address this issue. And often both developer and client each believes they own the code.

Sometimes it makes sense for the developer to retain copyright ownership while licensing the code to the client. This is particularly important where the developer plans to recycle the code on multiple projects for different customers.

On the other hand, a business owner may want proprietary rights to prevent development of competing applications. If this is the case, the owner may pay a premium to own the code. And perhaps license some rights to the developer for future non-competing use.

Of course, there’s also the issue of open source code (e.g. GitHub) and code that’s in the public domain (e.g. Unlicense). Because it’s common practice for software developers to “borrow” these to incorporate into a software application rather than reinvent the wheel.

If some of the code is open source, that needs to be disclosed so that the client knows the licensing limitations imposed on its use.

Similarly, if there’s public domain code in the new application, the client needs to know. For example, the application’s end-user license agreement (EULA) will need to address the use of open source and public domain code in addition to the proprietary code created.

Whether you pay for app development or are a developer, an experienced software lawyer can prepare the right legal documents that identify and protect your rights.