Copyright and Ownership of Code in a Tech Startup


1

I am currently involved in a Canadian tech startup, and as I am about to enter equity negotiations, I would like to clarify the ownership and copyright of the code base, to better understand the position I will be negotiating from. The situation is as follows:

I recently joined the startup as the third person working on the project. While I signed a NDA (which did not specify anything about ownership of code), I have not signed any other documents regarding the nature of my participation in the startup, nor have I made any comments or written anything on the matter.

I started off the code base by transferring code from a personal project, and I am currently the only person to have written any code for the project. No agreements were made when I transferred this code, and to this day, every file in the project has a copyright notice specifying me as the sole owner and copyright holder. The code is currently being hosted on a repository owned and controlled by the startup.

Who owns the code in this situation? What rights can the startup claim to the code? Now, suppose that other people start contributing to the project. The code that I originally transferred is a web framework, and is not modified at all. All other contributions are merely pages built on top of that framework.

In this situation, how is copyright and ownership assigned? Suppose I leave the startup. What claims can each party make on the code?

Co-Founder Technology Equity Canada Copyright

asked Jul 8 '13 at 08:55
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Chris
6 points
  • The company should get you to assign rights to them (either in full, or at the very least a royalty-free license to use and/or modify in any way they see fit). If they don't, you have to wonder what kind of operation it is and what other convenient "shortcuts" have been taken, which will come back to bite them, and their stakeholders, later on. – Steve Jones 6 years ago
  • Thanks for your comment. I already realize that this is a bad situation for everyone involved, and we will be sorting this out during our negotiations. What I really need to find out is the amount of leverage I have in those negotiations. I.e. if we are not able to come to an agreement, what powers can I exercise over the code? I'm not expecting to get perfect legal advise, but a general idea of what usually happens in this circumstance. – Chris 6 years ago
  • Have you received any compensation yet from the startup? – Ekoostik Martin 6 years ago

3 Answers


1

This company is already starting off on the wrong foot. Anyone working around technology development should have zero questions as to ownership of intellectual property - it should be very clearly understood by all parties. There should be a signed agreement in place that details everything that you are asking.

I'm not aware of the differences within the Canadian system, but in the U.S. you would be hard pressed to find investors without these agreements in place.

If I were in your position, I would halt all development work until this is cleared up. This isn't just for your personal benefit - this is for the stability of the company. Insist on getting a lawyer that understands these things and get the IP and corporate documents in order. Things are MUCH MUCH easier the earlier this gets handled. You don't want to be having these conversations once people get dollar signs in their eyes.

Money changes everything, but it can't change the signatures on a well-written contract.

NOTE: I am not a lawyer.

answered Jul 8 '13 at 12:37
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Dave H
46 points

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The startup is making a VERY VERY BAD MOVE. The startup typically would have whoever is developing the code sign an agreement that states that everything created in the course of the person's performance of services for the startup is owned by the startup.

In the absence of that kind of agreement, you might well own the code. At least there is a strong argument that you do. I'm not an expert on IP law (although I am a lawyer), and venture capital funds will demand that such an agreement be signed before they invest.

At least this is how it would work in the US.

I am not an expert enough to comment on what happens when others come into the picture.

answered Jul 8 '13 at 09:00
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User6492
1,747 points

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I can write few words as a developer not in position of law.

First, you mentioned there is your name written at the top of each file. That's a good move at your end, but since repository is owned by company, they have all chances of playing with it, in case they want. So first, make sure you secure self with certain public documentation of your code, something that can give you recognition for creating that code, which you can cite with confidence in future in case of any misdeed.

That being done, consult openly your concern with other team members. In technology startups, practices adopted by other members is irrelevant because it really doesn't mean anything. You have written the code, so you understand the loopholes as well. Try not to disclose those before any final decision.

Last, make them feel without you, they would not have any control over how solution works, and plan out few more great things to present to them. This way, instead of breaking up, you can increase chances of building a great startup, and having a successful one as well.

Rest, consult a lawyer what you can do in such a situation. Probably, try to find a lawyer who know the difference between GPL & LGPL :)

answered Jul 13 '13 at 01:39
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Akshayb
116 points

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Co-Founder Technology Equity Canada Copyright