Product ownership: how not to lose intellectual property rights to software

Sep 16, 2021

Starting a project, you probably want to know as much as possible to reduce stress and avoid potential problems. One of the things you should think of in advance is the possibility of losing intellectual property rights to software that was built for your project.

Let’s focus on the product ownership and some aspects of code ownership that you need to know about to be sure that things you will work on and invest in will actually belong to you, not someone else.

Be the owner of your product

Sorry, if it seems obvious, but actually there are many cases when people lose everything because of a single point in a contract, which is called “ownership”. And one of the most common reasons why it happens is neglecting the point of copyright for the software.

Development companies often offer a cheaper price in exchange for their ownership of the product. Imagine a real estate broker who offers not to charge his commission in exchange for making him the owner of your new house. Sounds absurd, but when it comes to software development, people manage to agree.

When work is still in creation, it belongs to the creator. And here in Ukraine, 95% of people who work in software development are independent contractors. You need to clarify if employees have the contract where they pass their rights to the company, and then the company will pass it to you. Because you don’t want to be in a situation where you and the developer who worked on your product have the same rights, and they claim those rights when you start making money.

Agree on the terms of passing this exclusive property copyright to you in the contract that should be signed before getting to work.

What is a contract, and what is an NDA?

A Non-Disclosure Agreement (NDA) is signed to protect the client's intellectual property and prevent issues around original ideas that might potentially bring profit if transformed into software. Why did we highlight this part? Because this is important. NDA doesn't protect your ideas. Ideas are not protected by anything at all! NDA is to protect some kind of expression of your idea: code, access, data, whatever, but not the idea itself.

Unlike a contract, an NDA is something that you sign before working with the company to be sure that they will not reveal information about anything you provide them with: corporate or some kind of sensitive information. You may have 100 NDAs with everyone, but only one contract with those you’ll be working with.

Tips to protect you from any issues with the copyrights

Here’s the first one: keep the codebase in your repository. You can use such tools as a GitHub, GitLab, Bitbucket or any available one. There are two ways of doing this: having your own private repository which developers have their own access to, or copying the code from their repository to yours after you pay the invoice for this work.

And the second tip might seem obvious again, but please: read the contract carefully. It should describe the process of how exclusive property copyrights are passed to you in detail. It is also important to make a note about contract termination terms. Let's say, if you have a contract for a year, what happens next and who has the copyright.

If you keep healthy relationship with people you work with, you won’t need this advice. But if you still want to find more of them, check our new podcast.


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