“If you come and ask for the rights afterwards, they WILL ask for money.” I’m sitting on a cold, hard chair in a nondescript classroom. A lawyer is lecturing us, young wannabe entrepreneurs, about intellectual property when dealing with subcontractors.
Fast-forward to a few years ago. This time I’m sitting in a much nicer and warmer place. An entrepreneur I met at the local coworking space is telling me about his project. “The source what?” A developer in Vietnam built the first version of his app. Now they ghosted him. No one knows where the source code is and, as far as I can understand, the developer still owns the intellectual property. Not great news, to say the least.
I hear similar stories all the time. A large client had to spend tens of thousands of dollars to get the rights to an app AFTER paying for its development. “It’s a different price if they actually want to own the code”, another developer tells me.
If you are an entrepreneur wanting to have an app developed, “who owns it” is a legitimate question. The good news is, it doesn’t have to be messy. Or expensive. We just have to think about it a little bit.
Who SHOULD Own It Anyway?
If an application is of any value at all (and I hope yours is!), the associated intellectual property is an asset. The value of that asset depends largely on the ability of a business to benefit from it.
On one hand, an application’s intellectual property has a lot of value for a developer who can reuse it in other projects. Take, for example, a developer specializing in iPhone food ordering apps for sushi restaurants. By reusing the same code base for each client, they can cut their costs dramatically!
On the other hand, maybe you talked to hundreds of urban indecisive foodies and what they really want is an app with just a huge Feed Me button causing delicious food to be delivered at their door in 30 minutes. Then, with your insights, you are uniquely positioned to market such an application.
In other words, if an application is just a tool for your business, its intellectual property will have more value for the developer than for you. Leave it to them, focus on your own business and save your money. But if an application is part of your business’ unique value proposition, it is crucial to own it fully!
The Fine Print
In the real world, both types of agreements exist. As a general rule, a developer owns what they develop by default Please don’t quote me on this as I am obviously not a lawyer and the specifics depend on your jurisdiction! Regardless, if you are having a developer build a custom, unique application for your business, you need to have them transfer the rights through an agreement. Platforms such as Upwork or Fiverr do this for you. Otherwise, you will need the proper clauses signed before starting any work.
At Gotologic, we are in the business of helping entrepreneurs build unique applications that will become their business’ greatest assets. As such, we make sure they get full rights on everything they pay for. And a copy of the source files. Everyone should have those.