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Usually when a contractor creates some new solution for their client it is understood that “tools of trade” used by the contractor are owned by the contractor, while any new IP created for the client is owned by the client.

What happens when the client wants to own all the IP? Does this ever make sense?

Wouldn’t that make it impossible for the contractor to build anything similar for other clients? How would the contractor grow their business if they stopped using tools of trade? Do these things even get enforced legally (how would one prove the solution was repeated elsewhere and thus infringing on IP rights?)

  • I don't see how "tools of the trade" come into it. The IP in the tools doesn't belong to the contractor. – phoog Jul 23 at 10:27
  • @phoog yes “tools of the trade” are the computer and IDE - not the code written for the client. – Dale M Jul 23 at 21:25
  • @phoog Tools of trade are not just libraries, frameworks and IDE. Developers create their own abstractions all the time; tooling that allows them to do their job more effectively. It needs to be specified that a client does not get the IP on these. – Cybernetic Jul 23 at 21:27
  • Most of these are questions of business practice rather than law, and might be better at Freelancers.SE. As the answers say, legally the parties can agree to anything they decide. – Nate Eldredge Jul 23 at 21:37
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The author owns copyright except in “work for hire”

A truly independent contractor (not an employee that is called a contractor) is not engaged in work for hire and owns copyright in the code they create.

In jurisdictions where copyright can be transferred then the contract can do that. Who owns the copyright is therefore a decision of the parties to the contract.

If the client owns the copyright then, yes, the contractor cannot copy it without permission. They can rewrite similar code that implements similar functions from scratch and it will, no doubt, look similar but that’s not a copy and doesn’t breach copyright law.

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  • I don't know about other French-speaking countries, but in France authors' proprietary rights can certainly be transferred. These correspond more closely to the rights protected by Anglophone copyright than do authors' moral rights, which cannot be transferred. – phoog Jul 24 at 6:52
  • @phoog I stand corrected – Dale M Jul 24 at 9:44
  • Sounds like there is a lot of grey area here, and hard to imagine people fighting this out in court. "...the contractor cannot copy it without permission. They can rewrite similar code that implements similar functions from scratch..." ... I interpret this as not outright copying the repo....but little changes here and there?...There must be a lot of fuzziness here on where that line gets drawn. – Cybernetic Jul 24 at 19:35
  • @Cybernetic if they start with the repo - that’s clearly infringement. If they start with nothing and reconstruct everything without reference to the other code, that hats not copying. – Dale M Jul 24 at 22:36
  • @DaleM I’m not sure that’s defensible in court. I have a damn good memory. Is there a line my memory might cross with respect to infringement? Also, there will be utility functions in that codebase that get used across multiple projects. Contractors build up their toolkit of useful functions that get repurposed for multiple clients. – Cybernetic Jul 24 at 22:40
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The customer will own exactly what is stated in the contract. As the contractor, who wants to be able to reuse code (which is in everybody’s best interest) you want to keep the copyright, with the client having the license to use the code any way they want. If the customer wants the copyright with the contractor losing all rights, that will be in the contract, and it will cost.

If the contractor produced an application that use lots of domain knowledge supplied by the client, that will often not give the client copyright, if the contractor is the one producing the actual expression of that knowledge by translating knowledge into code. If the client provides knowledge that is actually a trade secret, then an NDA should be signed. And again, it’s contracts. The client can put into the contract that their domain knowledge must not be reused. That is quite reasonable. The client might add to the contract that the contractor will not write software for any competitor. That is legal if it is in the contract, but it will cost.

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  • What about the "domain" the solution is built for? For example, say the solution was an AI healthcare app. Is there anything related to IP that can prevent the contractor from taking on new clients in the same domain (build another AI healthcare app for another healthcare company). Obviously the new app cannot have all the same code, but can the contractor take on new healthcare clients? – Cybernetic Jul 24 at 19:42

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