Best of the ISP-Lists

A Source Code Problem

What if you've hired a consultant to write special code but did not have them sign a contract? Members of the ISP-Webhosting list talk about how they handle contracts for custom code.

[October 17, 2001]

On the ISP-Webhosting list in October, DT inquired,

"I hired a programmer to do some work for our firm, and I'm happy with the results. Before we swap monies for source code, I want to get him to sign a contract saying that I own the product and he that has no rights to it whatsoever. Any advice?"

A number of respondents noted that persuading the programmer to do so might be difficult:

[OK warned] "I hope you told him that already! All consultants, when they give a price quote, mean that the source code is to be owned by them. I personally use my own custom-written libraries and code templates for all projects, and I certainly would not sell even their 'right to use' to anybody."

[CI added] "If the software was derived from GPL, you are legally entitled to the source, but then, so is everyone else. If the software was an original work created by the programmer and you did not contract for the source in advance, there is no legal obligation on the programmer's part to release the source to you."

Others observed that a basic contract should be easy to draw up:

[DG offered] "You need something called a 'non-disclosure/non-compete agreement.' You can use any search engine to find a few examples-here is a good one: www.inventnet.com/nondisclosure.html"

[OK added] "Just a put a clause in your contract about 'exclusive ownership of the source code.'"

JB contended that a basic contract would be insufficient:

"Since you are doing it on the tail end, a normal contract is not going to work. He already owns the copyright to the code simply by virtue of writing it. You now have to get him to surrender all rights to the code, as well as sign an agreement not to use the code for anything else. You need to cover the following bases: non compete, assignment of copyright, and agreement not to develop a similar program for another client for a set term. You cannot set this forever; it won't hold up in court. Really, depending on the value of this custom program and the lengths you want to go to protect it, your interest would be best served by contacting a good attorney."

CI argued that it's a little silly to demand ownership in the first place:

"I do not understand the fuss about owning the source on the part of most companies. Even if you owned all the source, you cannot erase the knowledge from the programmer's mind: all the non-compete agreements in the world cannot prevent the programmer from legally using parts of the source in other projects."

"If we are contracted to create software for a client, we make it clear to them that we will reuse libraries, algorithms, methods and processes, and functions on other projects, and that we maintain ownership of all works created prior to the engagement. These things are our stock in trade. No one has ever objected to this, because the alternative would be ridiculous. I presume the reason why you would hire an experienced programmer is that he has domain expertise and that he will save you money by reusing code and methods that he has previously created. Otherwise, it would cost you a ridiculous sum of money to reinvent the wheel."

"Do not get too hung up on owning source just so you can prevent your competitors from having software of similar functionality. It will happen anyway, whether your programmer or someone else does it."

— End