I have been the sole coder on a project for 4 years. I have a partner (not legally, yet but about to go through the process.) Right now, he owns 100% of the company and domain. Before the project release, I am to get 65% and he 35%. How can I secure my interest through copyright? What control does he have over my source code if I have it copyrighted? What process do I need to do to protect my interest and keep everyone playing fair? The completed code is not posted on his server yet.
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What does your work contract - written or verbal contract - say about your work product? Is your work - your code - seen as work for hire by him?– BlueDogRanchCommented Jan 16, 2018 at 17:07
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No it was my idea, and a mutual verbal contract from the start. He has been funding the project server and internet and i do all the coding. It was origionally my idea, but he was to take on the business side of it for 35%. my part was 65% for producing the product and design– JonnyCommented Jan 16, 2018 at 17:13
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He tells everyone he works for me so he does admit to that publically– JonnyCommented Jan 16, 2018 at 17:15
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But legally he owns the URL and LLC– JonnyCommented Jan 16, 2018 at 17:16
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Ownership of the URl/domain doesn't have much of anything to do with your code; ownership of the LLC could have impact if you are not a partner or have some control of it.– BlueDogRanchCommented Jan 16, 2018 at 17:44
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1 Answer
One issue that would come up is whether the code that you've produced is a "work for hire". The author of software holds copyright, except if it is created in the course of employment for company A, in which case A would hold the copyright. There is no bright line that easily distinguishes employment from other relations. If the coder is an "independent contractor", the product would not be a work for hire. Just because you say that you are an independent contractor does not mean that you are. If you are, there would have to be a written agreement to the effect that this is a work for hire (this article reviews some of the issues, relevant to a decision in New York). Usually, writing software is not a "work for hire", though it would be if you were a salaried employee of MS that wrote snippets of code. Work for hire falls into "employee" and "specially commissioned" categories, and software is not in the realm of the "specially commissioned" category.
In order for a company to use software that you hold the rights to, you have to grant them a license. If you fail to write out the terms of the license and just hand it over in exchange for something of value, the courts may eventually sort it out and find that you at least granted the company an implicit license to use the software. Rather than bothering with the expense and pain of the courts, you can negotiate agreeable terms. You could, hypothetically speaking, say that you retain all copyright in the product, and grant the company a license to use it on their servers (but not to modify or redistribute it). Or you could assign the rights to the company in exchange for gaining a 65% interest in the company: the possibilities are endless. Only you know what your interest is (and only he knows what his interest is), and nobody knows what "fair" is. What the law cares about is what you agreed to. So the first step would be to discuss your interests, and see what the common interest is, along with trade-offs of interest. Then write an agreement that describes that.
answered Jan 16, 2018 at 18:16
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Thank you very much this clears a lot up for me. Basically i should start a company and produce the license for 65% of the other company correct?– JonnyCommented Jan 16, 2018 at 20:43
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@Jonny: I don't see a reason to start a second company. The partner created a company by putting up money. You become the second investor in the existing company, but you don't bring in money. You bring in the copyright. It's quite normal for new companies to gain new owners over time, as new investors come aboard.– MSaltersCommented Jan 16, 2018 at 22:45