Where does the rights to the software lies when I've used them in the company?


1

I've developed an authoring tool for games and also a player that plays them on Android.
One year ago I founded a company with friends and we've published some really cool games by using the engine and tools that I've created. Now to my question:

If we were to sell the company (my partners and I own 25% each) where would the rights to the software lie? Does it belong to the company since we've used it for producing products or does it still belong to me? Can I sell the company and just start a new one with the same basis software and just replicate the company?

Thanful for answer
George Breed.

Software Legal Intellectual Property

asked Dec 3 '11 at 00:15
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George Breed
6 points

3 Answers


3

These are the kinds of things that should be sorted out when you found your company. :) For clarity, I will refer to the authoring tools and player as "Tools" to distinguish them from other software owned by the company (eg, the games").

Let's assume that you wrote the Tools before joining the company and that these Tools have not been changed since you joined the company. In this instance, you could argue that you still own the Tools and you let the company use them, a free license if you will. If you want to maintain ownership of the Tools, you could document this free license after the fact and hopefully your partners will agree to this.

If other employees modified the Tools or you modified the Tools after the company was founded, then it gets more complicated. The company presumably owns the work of the employees and also you as it relates to the company's products. You could argue that you as an individual and the company are joint owners of the Tools. If you want to maintain full ownership of the Tools, then you could

  • buy out the company's part ownership, or
  • give the company full ownership of the Tools in exchange for the company giving you a perpetual license to use the Tools in any way that you want.

Note that either of these solutions could diminish the value of the company to a prospective buyer.

Also note that this is a complicated and very fact dependent situation so this answer should only be considered as very general background information and not something you should act on.

answered Dec 3 '11 at 00:55
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Kekito
1,936 points

1

The answer to that question depends on what the buyer has bought, what is specified in the contract with the buyer. What exactly are you selling when you sell the company? Are you selling the existing products or are you selling the underlying software?

answered Dec 3 '11 at 00:49
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Paul Cezanne
649 points
  • "Selling the company" means just that. The owners of the company are the people who own shares of the company, so selling the company means the shares are transferred to new people. If you are selling products/software, then it would be an asset purchase. – Kekito 9 years ago

1

You have not provided enough facts for anyone to provide a definitive answer. (Since you have not mentioned any written agreements governing these matters, I will assume that there are none.)

The information you have provided suggests that you may well own the software that you developed. However, it is possible that the company has some sort of implied license granting rights to that software.

The only way to obtain a definitive answer will be to discuss this matter in detail with a lawyer.

Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.

answered Dec 3 '11 at 05:18
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Dana Shultz
6,015 points

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