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I was asked by a client to submit a proposal for a ofshoot system they intend to develop in-house. This client is a startup with a relatively good traction so far as far their main product is concerned.

The project has considerable R&D; it requires a lot of iterations to get right but the knowledge and domain-expertise gained from it are very important to me because they align with my areas of interest.

The problem is that it comes with an unusually strong language that prevents me from writing any of the code I write for them, for anyone else.

Up to this point I was drafting up contracts where I retain the exclusive rights to my source code and the client retains the same as well (selling, modifying etc.) - even if non-exclusive.

This isn't a non-compete; there's no mention of an NC clause.

So what if I have another client with a similar - but not identical - project?

Of course I won't copy code verbatim - why would I, I can recreate it from memory anyway; it just sounds to me that they want to preclude any use of the insights I gained ever again.

So the question is: Is that really a thing? Surrendering all the rights of my source code to the client could mean I am never able to rewrite this code for someone else?

Note: I know most of you here are not lawyers and I'm not really looking for legal advice. This is a proposal, not the contract.

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    Do you have the verbiage of the contract provision in question? Let's see it. Commented May 12, 2015 at 18:26
  • What type of code would this contract cover? Do you have a common set of libraries that they want exclusive rights to? Or are they after exclusive rights to all code written for this project? Commented May 12, 2015 at 18:36
  • I believe this only covers the specific implementation, so if you are allowed to write a generic database class, but not, say, a class to interface with their specific drivers. This is pretty standard in my experience, and if it bothers you, perhaps your should consult with an attorney? Commented May 12, 2015 at 21:25
  • They mean you charge more and it takes longer; the customer isn't just buying your time and you can't reuse all your useful generic libraries 'cause the customer will own them if you do. Commented May 12, 2015 at 21:57
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    I have been asked to draft up a contract ... are you a lawyer? Do you have any legal training? Would you ask a lawyer to draft a sorting algorithm for you? They are just setting you up to write up something that will screw you in the end, because I am sure they have an actual lawyer that is being paid real money to protect them, you should have your own lawyer paid by yourself doing the same for you. Commented May 16, 2015 at 18:42

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Ownership of the code means that you will be assigning copyright to them. In practical terms, that means that you will not retain any of their source code when the project is finished. That way, you can't be accused of reusing the code you wrote for them in other projects. This is a fairly typical arrangement; they are paying you to write code for them, so naturally they want to retain ownership of said code.

If there is other intellectual property that needs to be protected (i.e. some proprietary algorithm), then that algorithm needs to be dealt with specifically. In particular, the innovation needs to be novel, and not easily reproducible. Ideally, it is covered by a patent, but you can still be asked to sign non-disclosure agreements. You should abide by those agreements, and refrain from using the proprietary algorithms in other projects.

The key here is specificity. Your client should make it clear specifically what intellectual property and ideas they want to protect. Don't sign anything that casts a wide net like "you can't use any ideas you've obtained in other projects." That's an unreasonable demand. Don't sign a non-compete agreement either; it may prevent you from working on industry-related or competitor's projects.

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    For the record, pure software patents (i.e. patents which cover only software, without involving some specialized hardware) are controversial in some communities, especially among open source and free software groups. Involving a patent may complicate your job significantly if you need to work with one or more of those groups. Commented May 13, 2015 at 1:20
  • Thanks a lot for the answer - What happens If I don't keep a copy of the code but use an idea in another project with ahem..a similar code structure? - Assuming that this solution I devised is not patented of course. Commented May 13, 2015 at 7:26
  • @NicholasKyriakides you cannot copyright an employee's personal development. Anything you learn that is not specifically (legally) protected is part of your skillset. Example: If you get burnt by a product agnostic pattern and learn a better way of avoiding the issue, that is yours to use in the future. Commented May 13, 2015 at 9:42
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    @Gusdor Don't be so sure. There is a legal theory called the "doctrine of eventual disclosure", which suggests that you can't avoid eventually using what is in your head, even if you said you wouldn't. It has gotten some traction in US courts. Commented May 16, 2015 at 23:49
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    @RossPatterson ah the US courts. A bastion of righteousness. Sounds like just another creative way for them to restrict job mobility and pay their people peanuts. If you drive, you will definitely speed in your lifetime. Have a fine, just to be sure. Commented May 18, 2015 at 7:12
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This sounds pretty normal to me. The startup is being careful to be able to show that they fully own all of the code in their solution. This is very important if they are eventually purchased by another company. That other company needs to know that no one is going to later claim ownership to the software they thought they bought.

You might want to research the term 'work for hire'.

The short version is that you do your work, they pay you for it, then you hand over all copies of the code you wrote. Unless your contract says otherwise, this doesn't necessarily prevent you from writing similar code for another client (assuming of course that you don't share libraries or cut & paste code).

You may want to consult a lawyer about specifics.

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  • I agree with this. Most employers I've worked with, firmly, have a catch all clause when you sign. Commented May 12, 2015 at 21:22
  • this answer translates as you need actual legal representation that was not hired by your client Commented May 16, 2015 at 18:40

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