Software Development, Subcontractors, and Application Ownership

software development agreementWhen you’re developing software for a client and use subcontractors, who owns the application?

Now the answer to that question isn’t a simple one unless you’ve got the right agreements in place with both your client and the subcontractors.

Because it’s common for the client, the software developer, and the subcontractors to all believe that they own the code. And the right to recycle that code on other projects, sell it to others, etc.

Yet if your agreements don’t clearly state who owns what, it can quickly become a mess that leads to infringement lawsuits that can bankrupt you even if you are the actual owner.

Ideally, each agreement will clearly state who is the copyright owner and if the other party is a licensee, the scope of the license that determines what can and cannot be done with the code (e.g., cannot be sold to a competitor).

What if you developed an application for a client using subcontractors but didn’t address intellectual property ownership before work began?

First, deal with the subcontractors. Most will assign over their rights to the work if you’ve paid them. A few will ask for a limited license to reuse parts of the code.

Second, talk with the client and reach an agreement in writing on code ownership and any licensing to the non-owner.

Regardless of where you’re at in the software development process, an experienced software lawyer can help you with the right legal paperwork that protects you on this project. And he can create agreements you can use in the future with clients and subcontractors that prevent IP ownership from becoming an issue down the road.

 

Author Mike Young, Esq.

Mike Young has been practicing business and technology law since 1994. He's been an entrepreneur since 1988. To get legal help from Attorney Young, click here now or call 214-546-4247 to schedule a phone consultation.

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