Fair Royalty and Code Ownership...

[etrain]

I may have an oppurtunity to work with a friend to develop a software application that he has already noted he would eventually like to sell.

I would be the developer and act as a business analyst as well. Working with him to gather requirements and I am sure I will have my own ideas to lend. In the end I may not be the one to developing the final product just the prototype that he want to use in his business to test in real world situations.

My programming knowledge is limited to MS Access/VBA and some Oracle. The final product he wants to be web based (technolgy undecided). So I would need to learn fast ASP or something. But more than likely would work with him to contract developing of the final product.

So anyway I may end up doing this completely for free with the idea of getting a royalty and at least part ownership of the product.

Has anyone had this kind of the situtation? What is a reasonable expectation as far as royalties and ownership? Should I have a contract with him from the start? Am I in a better situation if I take no money upfront?

Thanks
etrain

Remember the Past, Plan for the Future, yet Live in the Present for tomorrow may never come.
-etrain

 

[etrain]

Forgot to add. I also have my current job to consider. I do not want them to have any rights to this product. I know that means keeping my company out of the loop completely but what other steps should I take?

What type of details should I keep track of for my home development time? Just time, date and a software name or more ?



Remember the Past, Plan for the Future, yet Live in the Present for tomorrow may never come.
-etrain

 

[sleipnir214]

Let's tackle the easiest one first. You absolutely, positively, no exceptions have a written contract that specifies your and your friend's duties, responsibilities, and ownership of the product. As Samuel Goldwyn once said, "Oral contracts aren't worth the paper they're printed on."


Let's handle the next easiest one first, keeping your employer out of the mix.

Make sure that at no time do you ever use your employer's resources while developing this application. Don't discuss the app with anyone during business hours, even on your personal cell-phone during a coffee break; don't send or receive email on this project through your employer's network or servers; don't develop this on your company-issued laptop; don't so much as take a single paperclip from work if there is the slightest chance that you might accidentally use it on this side-project.

Also, take a look at whatever contracts you signed when your employer took you on. Make sure that there's not language in there which gives the company rights to stuff you develop on your own time.



As far as royalties and ownership go, you get royalties because you are part owner of something that is licensed. What you own at the end of all this will be specified by the contract you absolutely must get right now.

Want the best answers? Ask the best questions:

http://www.catb.org/~esr/faqs/smart-questions.html

TANSTAAFL!!

 

[ChrisHunt]

sleipnir's absolutely right about getting it in writing - see this cautionary tale just posted in the web designers' forum: thread253-774803


-- Chris Hunt

http://www.mcgonagall-online.org.uk

http://www.napitalia.org.uk

http://www.leicesteryha.org.uk

 

[chiph]

etrain -
You might want to read John Walker's business incorporation documents at:

http://www.fourmilab.ch/autofile/

He's the founder of AutoDesk, Inc.

Chip H.


If you want to get the best response to a question, please check out FAQ222-2244 first

 

[OhioBill]

Sleipnir's got it write [SIC]. About the only thing I'd like to add is that you should have your attorney review and explain the contract prior to signing. Make sure that you are the one paying your attorney, not your partner.

You generally can't go wrong by getting some money up front, again on the advise of your attorney.

Make sure you set up a special Email account for the new project, and use a Spam filter to reject any email from work.