The Client Wants The Copyright, Is there A difference Price For That?

[CALocklin]

Re: The Client Wants The Copyright, Is there A difference Price For That?

I've had a few customers ask for "the rights" to an application I wrote for them and in most cases it's just because they want the ability to change/fix things in the future even if I'm not around.

My answer to that is that I will give them the passwords to access everything but I also make sure they understand that they are not to sell the application to anyone else without first consulting me since I actually own the rights. I'm not against them selling it; I just want my cut.:) In most cases, the response has been something like, "We don't want to sell it! We just don't want to be locked out if changes are needed and something happens to you."

Since they apparently paid you the "full price" up front, I suspect that there is a very good chance this is all they really want. In my experience, most people who expected to sell the application tried to get me to do the job at a reduced price for a cut of the profits. And I will NOT do any job for a reduced fee in exchange for a cut of the profits! See why below.

FWIW, I've also had a number of people who were sure their application would sell like wild fire when it was done. So far they've all been wrong. As someone else stated earlier, everyone wants something different. Attached are the screenshots of the 6 tabs of my Program Options form for my most successful generic app - about 3000 hour of development and 10 users. No, I'm not getting rich on it - not even close to a liveable wage off of it. Mostly because I didn't check out the marketability aspect before I started.

Be VERY skeptical of getting into any situation where you only get a small fee because you will get a cut of the profits when it's done and sold to "all those other companies who are dying for something like this." Check it out very carefully YOURSELF first - check out the demand, check out the marketability, check out the market price, consider maintenance issues (yes, there WILL be maintenance required even if you think your app is rock solid), think about marketing issues such as time, personnel, and direct marketing costs, and think about setup time/costs. If you've never done it before, double your expectations and assume you're still guessing too low.

My recommendation - get paid a reasonable fee up front for anything you do then make the "real money" later IF it sells. If it does sell well, the fee they paid you up front will be nothing. If it doesn't sell, you will have donated your time to that first company.

Now check out my program options to see how many there are and remember that NONE of them were required for the first customer. These were ALL added for subsequent customers even though each company is in the same business. The business is installing real estate sign posts. It's not the kind of business you would consider complex but I found out everybody wants to do something a bit different than the other guy. (And, FWIW, consider that one of my customers typically had 7000 posts installed at one time. Now multiply that by a cost (not price) of about $35-40 per post and you can see that he had nearly $250,000 of his inventory spread over two counties. Unless you like the idea of giving away 1/4 million dollars every year or so, tracking all those and getting them back is critical but realtors generally don't think about them once the property sells. ...And some people think it's not a "real business".)

Edit - Well, OK, I lied a little bit in that second paragraph. There are a few functions I won't give them access to because they are "my" routines but these can either be removed from the app without causing any real problem or, since it's a function, they can just remove the function call and do their own thing instead. For example, I won't give them access to my "upload to aims" routine that can be used to upload their data backup or application backup to my website because it contains the password to my website! Sorry, that's private! If I don't want them to upload anymore, I just remove their folder. (But it is a really handy function when they have problems and I need a recent copy of their data so I can find/fix the problem.)

[Steve Wood]

Re: The Client Wants The Copyright, Is there A difference Price For That?

I said below never to use the client's contract, but obviously sometimes that cannot be avoided. But I just had a client experience that gave me a very good reason TO let the client draft the contract (even if you don't accept and revert to yours). The client's contract, especially if created as a brand new document, really tells you who you are dealing with. I found, through several contract rounds, that I really did not want this assignment, even though it presented a decent return (but not guaranteed, based on future revenue stream, you know...if any).

I've never seen a contract before that, all at once, mandated an "open, colaborative relationship" (undefined), recognized me as an Independant Contractor, forced me to work from a one-page specification, while mandating the deliverables had to match the spec to the clients satisfaction, else no payment.

[Marcel Kollenaar]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Nigel,

If it hasn't been discussed before and agreed upon, I never, never, never give up my copyrights. I had a client that wanted the copyrights of the API code I had to translate for him. I said I won't give up the rights. I never heard from him after that. I think the man has eaten his hat. :D

Keep your rights and if the user quits the whole business you can sell it to others. The application you've build is promising otherwise he doesn't want te copyrights. If you do give up your rights you cannot sell the solution anymore.


Good luck!

[Terry]

Re: The Client Wants The Copyright, Is there A difference Price For That?

You should read the article at http://www.copylaw.com/new_articles/wfh.html related to "work for hire." As I understand it, unless a work for hire agreement was signed before the work was commissioned, the author owns all rights. The article further indicates that any agreement signed after the work is performed may be invalid.

Terry

[DaveM]

Re: The Client Wants The Copyright, Is there A difference Price For That?

To all here,

Timebomb explanation:

A timebomb(not rally a bomb) is setup in the application when in demo or when not fully paid for. Once the money is in and everything is a go, timebomb is removed with an update. There is plenty of warning to the end used before the app shuts down.

I did not mean to imply that all my apps were going to explode somebody's computer somehow. It just stops alpha from running my app.

I also have a way built in so the end user cannot sell the app( anything is breakable). It is my property, not his. The data is his, not mine. I really prefer to not know his data except when necessary to further the app.



.

[Keith Hubert]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Thanks Peter.

How well it would stand up in a law court I do not know, but it is better than nothing at all.

As it happens this particular client is very protective of the application I built for him and does regard the app as a competitive edge.

[Peter.Greulich]

Re: The Client Wants The Copyright, Is there A difference Price For That?

That's a very nice copyright notice, Keith.

[Keith Hubert]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Hi Nigel,

There is another consideration. You built this application for your client, the fact that they want you to sign the rights to them, indicates they recognize that you own them.

Now, why do they want the rights? Is it simply so that you do not approach a competitor company or, they can see a market potential? If it is the latter, perhaps you should then think about letting them do the marketing and you take a royalty.

How specialized is your client? Are they very big and there is very little chance of another company ever wanting your app? If so then sell them the rights for a big fat fee.

If there is a market potential and you can spend the time and effort in selling your app into that market, then you do not sell the rights.

In fact you make it perfectly clear that Alpha Software own the rights to the software, you own the rights to the application and they have no right to sell or copy the application other than for security and backup.

See thumbnail of Copyright I have on an About button on the Main Menu.

What has not been mentioned is service and support, if you sell them the rights, what happens next? Will that be built into the contract?

See also this thread http://msgboard.alphasoftware.com/al...ad.php?t=66518

I trust this has given you some extra things to think about. If you get to the point where contracts need to be signed, get a Lawyer.

Bottom line is Protect Yourself. Good Luck.

[nigeldude]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Hey Steve, I love that excerp from your contract, may I use that? (I have to ask, it may be copyrighted :D)

I'm not sure I'ld want to try the timebomb codes, I like the password protection and the compiling though,

I love the point made by Brett to find out "" what they wish to achieve by securing the application copyright? I'm deffinitly gonna go with that.

I really appreciate all the responses guys, this is a huge topic for me, and without you all, I doubt i could feel as comfortable as I do now, even with a lawyer on my side.

[Steve Wood]

Re: The Client Wants The Copyright, Is there A difference Price For That?

By the way, someone mentioned timebomb code in their applications. Companys have successfully been sued for damages by the client when they triggered such an event.

[brett s]

Re: The Client Wants The Copyright, Is there A difference Price For That?

With those in mind guys, I ask you not to tell me what I should do, but what you would do, if the client accepts that the ownership is yours but they are willing to negotiate a price to turn over that ownership to them.

Do you find it more feesable to turn down that offer than to up your price?

OK, understood. It's up to you now what price you set and agree upon, but set it on the higher side so you have room to negotiate.

To go to the next stage it is important to understand the reason why your client wants ownership. Perhaps they don't want you to sell the application to a competitor; maybe they don't want you to profit at their perceived expense because they have already funded it; maybe they have a possibly ill-conceived company policy/ IT department/ legal advice that says they must secure the copyright; maybe they just want to secure the data in the application of which you may already have a copy; perhaps they are concerned about protection of company intellectual property that is contained in the application that they don't want competitors to have access to; maybe they want to market and sell the application themselves.

In the case of the data that's not a problem. I always undertake to a client that company specific data incorporated into the application or supplied for testing purposes etc will *never* be disclosed to another party. So that requires no negotiations or payment from them.

I'm sure you will appreciate in the space available here I cannot really go into a lot of detail on the rest of the reasons. The answer may depend on additional factors too. But the point I want to make is that if they go ahead and secure the copyright it may not safeguard their interests and may not fulfill their original reason/s for wishing to act. A non-disclosure agreement may be more appropriate; an on-going support and maintenance agreement; an escrow agreement (where you provide the application source to an independent 3rd party who undertakes to only make available the source to the client in pre-defined extra-ordinary circumstances).

So my question now to the client would therefore be: What do you wish to achieve by securing the application copyright? Then take it from there. Maybe what they want to achieve will not cost you or them anything and you may still own the copyright!

[Steve Wood]

Re: The Client Wants The Copyright, Is there A difference Price For That?

You are right (somewhere in this thread), the customer mainly does not want their application to fall in to competitive hands. Here is the relevant language from my contract. You see it divides the copyrightable portions of the product in to several parts. Some I retain, some they get completely, some they get a license for. But get a lawyer who can draft contracts (not all of them can). I only started using this contract recently, operated mostly without prior to that. In most situations, if I wanted to take a product commercial that I built for someone else, I would, even though technically I DO own everything, I work with the client to take it to market. I figure they are due some respect for paying for it (Bob?) and it is good PR in most cases. Most often I want nothing to do with the product after it is done.

NEVER sign a contract provided by the customer unless you have it reviewed by a competent attorney. Have your own, make it part of your standard operating procedure. ALWAYS present your contract as the proper avenue for doing with with your company.

7. Copyright and Ownership of Code
Materials delivered under this and subsequent proposals (Agreements?) include five types of program code (where �Code� refers to program code, routines and modules needed for complete generation of the Software):
Category 1

a) Generic code already developed by Contractor and used in applications delivered to Customer.
b) Generic code developed by Contractor in response to a request by Customer during the creation of applications for Customer, but that is added to Contractor�s standard foundation.
c) Custom code developed by Contractor during the creation of application for Customer that may have use in a non-competitive application for another customer of Contractor.
d) All code and routines defined as Contractor�s �Template� in Exhibit B � AlphaToGo Desktop and Web Templates.

Category 2

e) Custom code developed by Contractor during the creation of application for Customer that is strictly proprietary to the application that Contractor is developing for Customer and gives Customer a competitive edge.

Category 3

f) A variety of third-party tools and other elements that are the property of a third-party company and used by Contractor for the purpose of development of this application (software?).
Contractor retains all copyright and patent rights with respect to materials described in Category 1, and grants to Customer a permanent, non-exclusive license to use and employ such materials within their business. Contractor will include Copyright notice in the Software to indicate ownership of this code.
Contractor assigns all copyright and patent rights with respect to materials that fall under Category 2 to Customer upon full payment.
Items that fall under Category 3 remain the property of the third-party company, but Contractor will supply Customer with information necessary to license said tools and other elements should Customer desire.

[nigeldude]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Ok, thanks dave, I'm set now on all angles.

To take a look at you asid note:
you stated "all my apps have something in them that is timed and mostly hidden that may explode the app one day."
I understand pretty much how you could set it to crash if someone else tamper with it, but the timed part I dont get. If you set a crash to happen aty a certain time in the future, how to you stop it, or delay it, if all is well?

[DaveM]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Nigel,

As I stated:

If they offer a monetary sum, you have a decision. It also means they recognize you have rights.

If I had a ready market for the app, I will keep the. rights for sure. If the market is slim, I would negotiate. Sometimes they will feel you have more chances to sell the rights than is real. Also, you stated that they do not want their competitors to have it.

No matter what, I would keep rights to reuse the code. Maybe give up rights to sell app to named competitors(for a negotiated fee).

I would NEVER sign anything at a meeting. Always take it home and show it to an attorney.

[nigeldude]

Re: The Client Wants The Copyright, Is there A difference Price For That?

Ok guys, thanks alot for your guidance.
I was asking if there should be a different price for signing over the copyright to them, but I realize thats not even a thought that you all entertain, You are saying, dont sign it over, dont sell it, keep it.

So far, this is my second app that I've done for a client, and this topic never came up in the 1st. I didnt want to do anything I wasnt sure of, so I asked for today's meeting to be set for next Tuesday instaed (awaiting your responses).
Thanks to you all I'm more confident of what my response should be.

We never did discuss ownership of the app untill now some 5 months after the project commenced. when I recieved the email stating that a contract is being drafted. And I did do it at my studio on my computer with my own copy of Alpha.

I will explain to them that unless otherwise agreed to at the time of commencement, I have ownership of the app.

I see where Dave said, "I never give up a copyright to any app I develope"
Then Brett said "Do not sign anything that prevents you from earning a living designing and developing applications"

With those in mind guys, I ask you not to tell me what I should do, but what you would do, if the client accepts that the ownership is yours but they are willing to negotiate a price to turn over that ownership to them.

Do you find it more feesable to turn down that offer than to up your price?
I ask this as a new comer to you guys who have experience in that area.