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floatingwoods

Software licensing

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Hi, The company I work for has been developing a software in the last 2-3 years (2 people worked on it). They however decided to abort development and use my software as a base instead (a software I developed privately prior joining the company). The software will be the basis of some bigger software, and I will be in charge of coordinating development and improving my software. The company pays me a salary (obviously) but the work I put into the software prior joining the company also deserves compensation. I don't want to sell the software since I would loose all rights on it. My question is now: how should I proceed in licensing the software? I want to keep the rights on it, but they still need to be able to modify it once I leave the company. They also need some kind of guarantee they'll be able to continue development even if I decide to stop development at some point in future. Any thoughts and similar experience would be greatly appreciated. Thanks

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Original post by floatingwoods
Hi,
The company I work for has been developing a software in the last 2-3 years (2 people worked on it). They however decided to abort development and use my software as a base instead (a software I developed privately prior joining the company). The software will be the basis of some bigger software, and I will be in charge of coordinating development and improving my software. The company pays me a salary (obviously) but the work I put into the software prior joining the company also deserves compensation. I don't want to sell the software since I would loose all rights on it.

My question is now: how should I proceed in licensing the software? I want to keep the rights on it, but they still need to be able to modify it once I leave the company. They also need some kind of guarantee they'll be able to continue development even if I decide to stop development at some point in future. Any thoughts and similar experience would be greatly appreciated.

Thanks


What have they expressed in terms of what they are or are not willing to do?

Sounds like you're entering into a classically doomed situation in that you want to accomplish two goals that may not be compatible with one another. In other words the have the cake and eat it too. Two people cant own something and a company can't function without knowing if the rug is going to be getting ripped out from under them. If you allow them to use your work then you have to give it up. You can negotiate the terms of all you want but that software "can't have two masters."

Those terms being that you get to work on it, get paid, and as you said, you should receive something for YOUR product. Perhaps royalties. Annual payout for as long as they use it, or whatever. That being said you have to think about all you have put into it, and decide if what you are being given is worth giving it up, because you have to. If the price is right though, it can very well be worth it. Only you get to decide that though.

Ironically I find myself in a similar situation where I know my boss would probably pay me for a program I made. However, I made it for me and am not sure he could pay the price it would take to get me to turn loose of it. Since I can't see myself turning loose of it, I'm not going to.

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Original post by Goober King
If you allow them to use your work then you have to give it up.

Not inevitably.

Floatingwoods, it all depends on what kind of contract you negotiate. It's clear that they want certainty and legal reliability. You want to protect your rights and get paid for it. The fact that you're their employee makes the situation a little more tricky, but not a dead end either.

First off all, you need a lawyer for this. If you write up a contract on your own, or just sign their draft without understanding all implications, then it's extremely easy for them to rip you off. Get legal advice on that one.

That said, you will probably want to negotiate a third party licensing deal. In essence, you regain the copyright on your work, you get compensated for it (for the part you originally brought, on the ongoing development and on possible future developments if you quit the company), and they get a bunch of (exclusive or non-exclusive) rights to use your software in some well defined ways. Clauses must precisely define how they pay you (one single payment, fixed royalties, percentage of turnover, etc), what rights they gain on your software (eg. rights of modification, reselling, sublicensing, etc), scope of application (only on one product, a product family, or global), any possible limitations of usage scope (only in a certain industry, over a certain time period, a certain geographical coverage, etc) and special / exit clauses (what happens if they terminate your employment contract / if you quit, if the company goes bankrupt / gets bought up by a competitor, if the deal can be broken by either party and to what conditions, if the deal can be renegotiated at a later time, etc). Not to forget the very important clauses dealing with liability (who is liable in the event of a failure, destruction of customer data, downtime, profit loss, etc).

This is not trivial, but a good IP lawyer should be able to draft a good contract for you, that will be acceptable for both sides.

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Thank you for the replies. I agree that a good agreement is very important and that I should be backed by a lawyer. Anyone has a draft of such an agreement to give me an idea? The other thing that might be important is that I work for a relatively small Korean company in Korea... there we might get language or understanding problems, and I can't imagine handing a 10-page agreement to them! Things have to be expressed in a simple way.

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Don't worry... Most companies have access to translation services, especially if they do business with foreign companies and individuals. You could probably get away with making them incur the cost of translating the contract. Make sure you add a clause that clearly states the English version prevails in case of ambiguity, though.

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Original post by floatingwoods
I agree that a good agreement is very important and that I should be backed by a lawyer. Anyone has a draft of such an agreement to give me an idea?

1. You must find a local Korean lawyer with experience of Intellectual Property licensing. Reading a UK or US agreement probably isn't a good idea as Korean law may have some specific differences and this could cause mistakes.
2. The agreement you need is a license agreement which means you keep ownership and full rights to use your software in future but the company has a license (permission) to use your software and to make changes and to continue to use it forever (but they only have rights to use the software you give them now - not any future stuff you may develop).
3. You really do need a lawyer to write this agreement
4. A lawyer is needed to write this agreement.
5. Make sure you charge them enough for your software to cover the cost of paying the lawyer.

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Thank you Obscure,

I heard many times around me that I need a lawyer. This seems to be the right direction, however:

If I grant them a license, I will keep the core of the functionality (robotics-related algorithms) hidden in a dll, while the rest would be open for them to modify. Moreover they would (well, that's my plan) have to access my website to generate license files (corresponding to a specific computer's ID). I would be in control of that, so there is little risk for me. The dll would work with errors randomly if the license file is not correct. Any resources about implementing this in a relatively crack-resistant fashion? (I know perfect protection is NOT possible, however there are different degrees in protection system)

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