>A good practice - I do the same. Its surprising though how much many slightly
>technically literate 'entrepeneurs' over-value this. Perhaps it has a lot to
>do with the need to control the 'core technology' so their investment is not
>marginalised and should another customer approach you with a similar
>requirement.

That's part of it.  Mostly it is because there are multiple applications of
a generic cat-skinner.  Once I have a cat-skinner operating, why invent a
new one?  The value of professionals is that they have solved the problem
once and a company can get the cost of a new product reduced by the pro
re-using stuff he developed for somebody else.  Or for them (repeat business!)

>I suppose that in the process of you developing critical code segments that
>could
>be used for other purposes - that these are retained as your own intellectual
>property and never sold outright ?

Usually, but not always.  It all depends on the customer and the rate.  One
of my customers was my former employer, and has been helpful in providing
work when I didn't have it elsewhere.  They get a little better treatment
than most.  Another customer is slow to pay - he gets less.  Another pays
with stock in the company (I like that!).

A lot has to do with the trust between my customer and me.

>>The source code goes to a lawyer who puts the files in an "escrow" account,
>>to be delivered to the customer in 5 years or we go out of business.
>
>Please clarify, is this 5 years from the delivery of 1st working unit of the
>completed development or 5 years after the last delivery of pre-programmed
>chips. Do you get the client to explicitly pay the lawyers fees or does that
>come out of 'normal administrative overhead' ?

There is usually a contractual milestone at which the product is "done"
such as start of first full production run (a trial run is beta testing,
after all).  That would start the 5 years.  The customer has no need to
contact the lawyer, other than to make him know about any change in their
status (they moved, etc.)  Usually, my lawyer and their lawyer are the ones
who talk.  Anyway, the fees are minimal - Annual safe-deposit-box at the
bank that the lawyer has the key to, or his own in-house fireproof safe, a
few bucks to write up the escrow agreement, and the rest is handled under
his retainer.  Shoot, how much do you expect to pay somebody to do
absolutely nothing?!?!

First time it cost me < US$500, and that was basically because I bought him
the safe (he's a buddy since elementary school).

>Anyway, after 5 years do you still retain copyright indefinitely ?

That stays with me permanently, although they are granted the right to
modify the code so long as it stays within a the original product area.
They do NOT get the right to pick Subroutine A and ALgorithm B and make New
Product XYZ, nor to disclose it to personnel (other contractors) other than
to make enhancements to the original product.

Again, it depends on the customer.  Some folks get the rights to the code,
always with the note that I have the rights to use any part of it in any
other product.  It is a compilation of library components.  You don't get
to buy the books, just the right to use them in your product.  They are
still my books for use elsewhere.

>True, does depend on the customers requirements and what they think they
>need to be
>in production and how much support they require you for.  When you say no
>restrictions - does that mean that the company can on-sell the source code
>and project to a third party - then who owns the copyright ?

Yes, even that far.  Often work is subcontracted, and then I'm bound by
their contract.  WIse is the man who checks to see what this costs before
bidding!

I ALWAYS retain the right to use developed code.  That is _NEVER_
negotiable.  They get rights to the collection of routines, not to the
routines themselves.

>Can the company include the 'unrestricted' source material on their asset
>register ?

I ain't a lawyer, nor an accountant.  Ask one of them.

Andy

==================================================================
Andy Kunz - Montana Design - 409 S 6th St - Phillipsburg, NJ 08865
          Hardware & Software for Industry & R/C Hobbies
        "Go fast, turn right, and keep the wet side down!"
==================================================================