Angie and coryn,
The copyright in software (i.e., ownership of the rights and responsibilities) belongs to the author of the work. If you create a computer program--whether or not you get paid and whether or not you are a sole proprietor, corporation, etc.--you are deemed the owner unless there is some written agreement to the contrary. (Note: That doesn't mean you own what you create if you work for, say, Microsoft. Companies that employ developers, programmers and analysts usually have their employees sign employment agreements that assign to the employer all of your IP rights.)
When you run your own IT consulting business and create intellectual property for a client, you are deemed the owner unless there is a written agreement otherwise. Clients will often want the project done as a work-for-hire, meaning they own the result in exchange for paying you. Owning the work also means that you own all intellectual property liability if someone comes along and claims that your work violates their rights.
There are ways to get what you want and satisfy your client. First, examine what it is that you really want to accomplish. Do you want to own the product for marketing reasons? To limit competition? For financial reasons?
Ask yourself if ownership of the intellectual property is as important as having whatever rights you need to use it. For instance, you could agree to the work-for-hire provision, but have the client grant to you a perpetual, unlimited, royalty-free license to use the product for any purpose that you desire. Doing so means that you are not the copyright owner for IP liability purposes, and you get to use it as if you did own it. A downside is that the client can do what it chooses with the product. However, as part of your negotiations, you could agree that they own the work so long as you get the above license rights, PLUS, they agree not to... (you fill in the blank on whatever you don't want them to do, like selling or giving the product away to one of your competitors or potential other clients). There are lots of variations that could result in a win-win for you and your client. The key is identifying what's important to both of you.
I'm a software lawyer who recently left a large software company. I'm in the process of starting my own technology and business law office. Contact me if you would like follow-up. Good luck.
Rich
rckatz_usa@comcast.net
