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'[OT] Intellectual Property Ownership'
1998\03\04@101419 by Peter Casavant

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I am IBM employee who is leaving IBM to start my own design service company. I
am uncertain what rights I should be retaining, and what rights I can give my
customers ownership of. Is there anyone out there that can advise me in this
area?

Thanks,

Pete Casavant

1998\03\04@112626 by Bob Shaver

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Well, you can *try* to retain all rights to whatever you build.  What ever
is in the contract between you and your customer is "the law". However, in
practice most companies won't sign that kind of agreement.  Most
importantly, don't try (or appear to try) to swindle your customers.  My
company provides design (h/w & s/w) for other people.  Our development
contracts fall into three categories:

1) Almost all of our development contracts pass non-exclusive rights of
ownership to the customer.  This
means that they own a copy and can do whatever they want with it, and we
retain the right to use/modify the design for our future purposes.

2) Some companies insist on exclusive rights, and we charge them more for
this privilege.

3) Sometimes we propose that we "fund" the development ourselves and sell
it as an "off-the-shelf" item to the customer.  We do this when we see an
opportunity to sell the product to other customers, or in volume to the
original customer (of course we don't say that to the original customer).
We usually give the original customer a small price break (incentive) for
this option).

Most of our work is building prototypes for others, so most of our
contracts (90%) are the first type.  About 5% are the second type, and the
remaining 5% the third.

On Wednesday, March 04, 1998 10:15 AM, Peter Casavant
[SMTP:spam_OUTpcasavanTakeThisOuTspamUS.IBM.COM] wrote:
> I am IBM employee who is leaving IBM to start my own design service
company. I
> am uncertain what rights I should be retaining, and what rights I can
give my
> customers ownership of. Is there anyone out there that can advise me in
this
> area?
>
>  Thanks,
>
>  Pete Casavant

1998\03\04@153743 by William Chops Westfield

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   2) Some companies insist on exclusive rights, and we charge them
      more for this privilege.

What happens to library and "reusable" code when the customer demands
exclusive rights?  Presumably pre-existing libraries and code aren't
covered.  What about brand new code developed as part of the project?  (Say
you need to write serial-dataflash routines for the first time.)  What
about code developed based on internal information from the company? (ie
code for read a non-standard GPS receiver or somesuch.)

BillW

1998\03\04@155756 by Bob Shaver

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On Wednesday, March 04, 1998 3:36 PM, William Chops Westfield
[SMTP:.....billwKILLspamspam@spam@CISCO.COM] wrote:
>     2) Some companies insist on exclusive rights, and we charge them
>        more for this privilege.
>
> What happens to library and "reusable" code when the customer demands
> exclusive rights?  Presumably pre-existing libraries and code aren't
> covered.  What about brand new code developed as part of the project?
(Say
> you need to write serial-dataflash routines for the first time.)  What
> about code developed based on internal information from the company? (ie
> code for read a non-standard GPS receiver or somesuch.)
>
> BillW
>

3rd party libraries are exempt, as should be any pre-existing in-house
libraries (be safe and put this in the contract).  However, in my
experience, the customer expects to own all code that was written
specifically for this project.  This includes flash download, GPS protocol,
etc.  On the other hand, you can always state up front that you wish to
retain the rights to any "general purpose" routines, such as generic
protocol handlers.

Again, the best case is to negotiate these items up front.  If you discover
mid-project that you will be writing this type of code, try to renegotiate
the contract.  Remember, it (almost) never hurts to ask.

1998\03\04@185618 by Eric H

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I can appreciate your position, but I recently worked for a company that,
after spending many months on a project, failed to pay.  There were numerous
delivery options for the project, but when I asked for money after
completing 1/2 the project, I was "locked out" of the company, my personal
equipment seized, and the source code farmed out to another company.
 My suggestion is to give your customer the object (compiled) product, and
turn over source after payment.  On a hardware project, it is of course more
difficult, but for software, a simple encryption of the source would protect
small, independent developers.
 Of course, there were no signed agreements, and everything was friendly up
until I asked for payment.

Eric H.
{Original Message removed}

1998\03\04@202326 by Ross McKenzie

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At 03:45 PM 3/4/98 -0000, you wrote:
>I can appreciate your position, but I recently worked for a company that,
>after spending many months on a project, failed to pay.  There were numerous
>delivery options for the project, but when I asked for money after
>completing 1/2 the project, I was "locked out" of the company, my personal
>equipment seized, and the source code farmed out to another company.
>  My suggestion is to give your customer the object (compiled) product, and
>turn over source after payment.  On a hardware project, it is of course more
>difficult, but for software, a simple encryption of the source would protect
>small, independent developers.
>  Of course, there were no signed agreements, and everything was friendly up
>until I asked for payment.
>
>Eric H.

Eric,

You have my sympathies, and whilst they will not put food on your table, I
guess it is a good lesson for everyone else. Always get it in writing, no
matter how trivial. I keep a diary of requested changes also.

Progressive payments linked to demonstrable/verifiable stages of work can be
used to trigger the warning bells also. No payment, no further work. I walk
away from any prospective customer that refuses this condition. I also do
not accept work from any customer that I feel uneasy with/about. At the end
of the day, work should be enjoyable.

Best wishes,

Ross McKenzie
Melbourne Australia

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