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| reply to Airplane777
Re: Sub-contracted software developer owning software ? I've been doing custom development since 1980. My standard contract gives me full, perpetual ownership of and rights to all work products, "know how" or other intellectual property developed; the client has a perpetual license to use the program product, or to subsequently modify it as may be necessary or desired as time progresses. The client is limited to using the program product solely for the purposes stated in the contract. The code or product cannot be sold or licensed to another party (though usage rights transfer automatically if the company merges or is sold). I am free to re-use the code and know-how as I choose without further consideration or obligation to the client.
In cases where there are specific business details or methods that are considered proprietary/trade secret by the client and are identified as such prior to commencement, and which have unique attributes that distinguish them from any other implementation of a similar process, those are excepted from my ownership rights. (There is very little of this in typical LOB and BO applications; it's mainly found in industrial and scientific domains.)
As for resale product, the terms and conditions have to be spelled out in the contract. I typically require my copyright be presented everywhere theirs is, prohibit distribution of source code to purchasers, and charge a considerably higher fee and require a guaranteed percentage of gross sales over the lifetime the product is sold. I also require the EULA restricts sale/use to only non-competitive customers (i.e., that don't produce the same or similar software product).
Do make sure you clearly identify and record in advance any aspects/attributes your company considers proprietary/privileged/trade secret, and include them in the contract.
For a resale product, make sure you arrive at a design strategy that makes it difficult for others to reverse-engineer the product. (There's no such thing as "impossible.") Be sure to have the EULA developed by an attorney with specific expertise in current software copyright law...this excludes 99% of corporate counsel. Do not be surprised if the developer wants a 100%-200% premium for development up front. Typically the developer will get 40%-60% of total product gross between initial development and percentage of lifetime sales. Depending on what a product does and how much of it the developer had to divine/design versus the client's input, it isn't unheard of for the developer's take to go as high as 90%.
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