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Client wants to resell database

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I have nearly finished work on a database for my client. At the start of the
project we touched on the subject of reselling the database to other
businesses in the same market as my client.

How dose one approach this? The client has the contacts (the who's who) and
had the initial idea for the database. But I my ideas have added to the
functionality of the database and the UI is largely my design and of course
the code is 100 percent mine.

So how do you work out a split? 50-50 each of the profits? Is their any
standard practices for this? Do I licence the database to the client? Or do
I become his business partner? Help!

Paul
Jul 21 '06 #1
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9 Replies


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Paul H wrote:
I have nearly finished work on a database for my client. At the start of the
project we touched on the subject of reselling the database to other
businesses in the same market as my client.

How dose one approach this? The client has the contacts (the who's who) and
had the initial idea for the database. But I my ideas have added to the
functionality of the database and the UI is largely my design and of course
the code is 100 percent mine.

So how do you work out a split? 50-50 each of the profits? Is their any
standard practices for this? Do I licence the database to the client? Or do
I become his business partner? Help!

Paul
Firstly you must work out the split 50/50, 40/60 or what ever between
you and the other party involved, and it is what ever you both feel is
fair. I would suggest you stick with 50/50.

Unless you signed your rights to it away, I beleive that the
intellectual copyright over the code is still yours.

I would suggest that you sell the database, and then charge the
companies involved for support, this can be done of one of basis
whereby you charge for the amount of time that you spend sorting out
the issue, or an annual contract where they would receive a certain
amount of support free of charge, and they would receive updates and
possibly patches as become available.

Good luck

Nick

Jul 21 '06 #2

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It depends on the contract you signed. If it was verbal and the client
paid you for your work, then technically he owns the database. Just
like if you were hired as an employee of a company, the company owns
whatever code you write.

If you specified BEFORE you started the contract that the code remains
yours and they're only paying for a finished product, then you retain
the rights to it.

Since 99% of freelancers out there never think that far in advance,
I'll assume you fall into the first category. I'd take whatever split
you're offered or can cajole because I believe technically you're
entitled to 0%.

You may want to skim through places like FindLaw.com and look for
articles or cases relating to intellectual property.
Nick 'The Database Guy' wrote:
Paul H wrote:
I have nearly finished work on a database for my client. At the start of the
project we touched on the subject of reselling the database to other
businesses in the same market as my client.

How dose one approach this? The client has the contacts (the who's who) and
had the initial idea for the database. But I my ideas have added to the
functionality of the database and the UI is largely my design and of course
the code is 100 percent mine.

So how do you work out a split? 50-50 each of the profits? Is their any
standard practices for this? Do I licence the database to the client? Or do
I become his business partner? Help!

Paul

Firstly you must work out the split 50/50, 40/60 or what ever between
you and the other party involved, and it is what ever you both feel is
fair. I would suggest you stick with 50/50.

Unless you signed your rights to it away, I beleive that the
intellectual copyright over the code is still yours.

I would suggest that you sell the database, and then charge the
companies involved for support, this can be done of one of basis
whereby you charge for the amount of time that you spend sorting out
the issue, or an annual contract where they would receive a certain
amount of support free of charge, and they would receive updates and
possibly patches as become available.

Good luck

Nick
Jul 21 '06 #3

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"ManningFan" wrote
It depends on the contract you signed.
If it was verbal and the client paid you
for your work, then technically he owns
the database.
Your statement is in error, at least in the United States. Absent a contract
to the contrary, the author of original work owns the copyright as soon as
it is fixed in tangible form. There are however, many special cases, so it
is A Really Good Idea to review your situation with an attorney specializing
in copyright, patent, and intellectual property law before proceeding on the
"default case."
Just like if you were hired as an
employee of a company, the company
owns whatever code you write.
You are correct that this is the "default case" for an employer/employee,
but again, because of the many special cases in IP law, it is A Really Good
Idea to review your situation with an attorney specializing in copyright,
patent, and intellectual property law before proceeding on the "default
case."

You aren't going to get a definitive answer from the Internet, and perhaps
not until you resolve a particular case in court.

Larry Linson
Microsoft Access MVP
Jul 21 '06 #4

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"Larry Linson" <bo*****@localhost.notwrote in
news:2lbwg.68$2u4.42@trnddc06:
"ManningFan" wrote
[]
Just like if you were hired as an
employee of a company, the company
owns whatever code you write.

You are correct that this is the "default case" for an
employer/employee,
And it's precisely the opposite for an outside contractor.

I apparently have "ManningFan" in my killfile, which appears to be A
Very Good Thing.

--
David W. Fenton http://www.dfenton.com/
usenet at dfenton dot com http://www.dfenton.com/DFA/
Jul 21 '06 #5

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"David W. Fenton" wrote
I apparently have "ManningFan" in my
killfile, which appears to be A
Very Good Thing.
Now, if all the newer participants here would do the same, they could avoid
a great deal of misinformation and that would be, also, A Very Good Thing.

Larry
Jul 22 '06 #6

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"ManningFan" <ma********@gmail.comwrote in message
news:11**********************@75g2000cwc.googlegro ups.com...
It depends on the contract you signed. If it was verbal and the client
paid you for your work, then technically he owns the database.
A verbal contract is a contract, and is valid as written contract (except in
certain transactions such as in real estate). The problem is enforcing a
verbal contract via the court system.

If you verbally agree to transfer the intellectual property to the client,
the client owns the property. If you then decide to resell it, the client
can sue in court, and attempt to prove the verbal contract.

If there was no agreement, verbal or written, then the other posters are
correct; the ownership defaults to the developer in an independent
consultant arrangement, and to the employer in an employer-employee
relationship.

As an aside, I have had two clients over my consulting career who insisted
on resell provisions .... never was a product resold. If you don't have a
written contract, give the client a good deal and use the negotiations to
document that you own the software, as long as you cover your standard
billing rates and direct expenses if the client does resell the product

Steven

Jul 23 '06 #7

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"Steve" <st***@nospam.netwrote in message
news:D4****************@fe08.lga...
>
"ManningFan" <ma********@gmail.comwrote in message
news:11**********************@75g2000cwc.googlegro ups.com...
>It depends on the contract you signed. If it was verbal and the client
paid you for your work, then technically he owns the database.

A verbal contract is a contract, and is valid as written contract (except
in certain transactions such as in real estate). The problem is enforcing
a verbal contract via the court system.

If you verbally agree to transfer the intellectual property to the client,
the client owns the property. If you then decide to resell it, the client
can sue in court, and attempt to prove the verbal contract.

If there was no agreement, verbal or written, then the other posters are
correct; the ownership defaults to the developer in an independent
consultant arrangement, and to the employer in an employer-employee
relationship.

As an aside, I have had two clients over my consulting career who insisted
on resell provisions .... never was a product resold. If you don't have a
written contract, give the client a good deal and use the negotiations to
document that you own the software, as long as you cover your standard
billing rates and direct expenses if the client does resell the product

Steven

Thanks everyone for the insight, I had no idea. OK, so that's the basic
legal stuff covered, how about the ethical/emotional stuff...

The client approached me with an idea, we collectively refined that idea and
I then designed a UI and data repository for that idea. My gut feeling says
50% each of the profits is a fair split, regardless of what the law says I
am entitled to.

Would you be lead by your conscience of your wallet? Am I mugging myself
wanting "only" 50%?

:O)

Paul
Jul 24 '06 #8

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"Paul H" <no****@nospam.comwrote
Would you be lead by your conscience
of your wallet? Am I mugging myself
wanting "only" 50%?
Writers are always getting suggestions from people on what to write an
article or book about, and the people making the suggestion usually think
they should get about an 80% or 90% share. Most writers thank them
graciously, say they are otherwise occupied, and tell them that 'good ideas'
are not even worth a dime a dozen.

Software authors have to be careful if they are approached by someone who
has a "good idea" and wants the software developer to work on an "equity
participation" basis -- because the vast majority of these cases work out to
the equity being worth exactly nothing, but requiring lots of time and
effort before the whole project craters.

If the client has paid you to develop the database, and both you and they
are agreed that 50-50 is a fair split, then it IS a fair split. If, on the
other hand, they expect you to not charge for development because you are
going to split 50-50, that may not be a fair split. In that case, I'd
suggest you charge full price for the development and they pay that before
selling a single copy, agree to the 50-50 split and let them take your 50%
until half their investment in the development is covered, after which the
profits, or revenue (whichever you determine) is split 50% to each --
equally sharing in the cost and return.

I caution you need a good attorney specializing in intellectual property and
business contracts to prepare the agreement; or to review and revise the
agreement prepared by the client's attorney.

Larry Linson
Microsoft Access MVP

Jul 24 '06 #9

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Larry,

Thanks for your further input and insight. This thread has been extremely
helpful to me.

Paul
Jul 25 '06 #10

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