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Work for Hire Project - Opinions Requested

by Anonymous Monk
on Feb 01, 2003 at 08:46 UTC ( #231818=perlmeditation: print w/replies, xml ) Need Help??

I'm in a quandary and would like to beg your opinions. I'm writing this as the unknown one, as well as using the very generic "they" and "them", to protect the innocent.

I've hired a friend to write a series of modules for us as a "work for hire" project, with which we would build other programs on. It was not to be a standalone program and required my programming to make usable for public consumption.

Time is always an issue for me and I (and his peers) respect their architectural skills, so I contacted my friend (who was available and in need of work) about cost. I had some extra money in the bank, wanted to help out a friend in addition to kickstarting me into writing this program I've been planning for ages. The program I've been planning will use the modules being written by my friend. A few thousand dollars for a "work for hire" program was verbally agreed upon. We specifically expressed many times that my company wanted only "work for hire" so there wouldn't be any issues with ownership. They verbally agreed each time.

The concept of the modules is, from my extensive research on cpan, sourceforge, and a variety of other locales, unique and wholly mine.

For reasons that seemed logical at the time, they've convinced me to use a program that they've written previously as a foundation of the program, which committed us to a gross 15% royalty on everything we sell (on our total gross sales price, not just their portion of the program) Hesitantly, we agreed. We valued their experience and skills enough, and wanted our friend to succeed as much as we want to succeed ourselves to agree to that 15%.

We've paid them a 30% deposit (US$1k) as a deposit for the modules, based on our conversations, which included the "work for hire" clause (they seem too fond of conference calls over writing to my tastes, so we have little in writing). The "work for hire" to us, and the world around us, usually means that full ownership is tranferred to the purchaser (us) upon satisfactory completion of the project (they write it, we're happy, we pay the balance).

Now, after half of the development is completed, they see the extreme usefullness of the modules and want to have the ability to sell it to their own clients as well as as incorporate it into the program that they've written as well as have us continue to pay the 15% royalty (on gross) for their other program.

My problem (and yes, I've flagellated my real username too many times to count already, and will probably continue to do so) is that we didn't do a written contract. Apparently, the written contract is required to be considered an official "work for hire" project. We didn't have the concern, time or resources to find/hire a lawyer specializing in technology to write up the contract, and we (rather, I -- my partner is not pleased with me to do this based solely on a friendship with the programmer in question) skipped that process.

So now my friend has $1k of our money and will undoubtedly want the rest in addition to the abilility to resell the product we've paid for them to write exclusively for us iun addition to us paying a 15% gross sale price royalty for each of the products we sell. I don't feel at all comfortable in funding a project based on my brainchild that they can turn around and resell.

I know I did this entirely the wrong way. I shouldn't have done this without a contract just because it was a friend, and I especially shouldn't have provided a deposit based on our verbal discussions which agreed to "work for hire" (which implies that we own the product).

Personally, I think that my idea is good enough that other people would see great use in it as well, but is it up to the contracted programmer to determine what he'd like to use at another time in the middle of a contract? And if he refunds my deposit and uses my idea, well, that's an affront, too. And if we decide to keep it a work for hire, then will I get the best product that he can produce so he can keep the best to himself? Man, this really stinks. I wish I had a contract, and I wish my friend were ethical enough to keep his verbal contract. Requesting a change in terms in the middle of a contracted project (especially after receiving a sizeable deposit) just seems like bad business practice to me.

So my question is... if you were dumb enough to do what I did... what would you do?

S/He who will remain anonymous

  • Comment on Work for Hire Project - Opinions Requested

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Re: Work for Hire Project - Opinions Requested
by Aristotle (Chancellor) on Feb 01, 2003 at 12:13 UTC

    Sigh. All I can say here is that you should never, never involve more than pocket money without a written contract. Even discarding malice, there may always be a misunderstanding, and a written contract makes sure there is no room for misinterpretation, changing ideas or bad memory on anyone's side.

    As for this case, it seems to be an issue of reevaluating your relationship to this person at least as much as one of legal advice. So since you're asking what I would do, I'm pointing out the following which is heavily painted by my own personal bias.

    The two points I'd think about here are that I take trust and respect very seriously myself and don't tend to forgive violations towards me either; and that I believe ideas are a dime a dozen; the dirty work of proper implementation is worth as much as the idea itself, if not more.

    So I can see where you friend is coming from; on the other hand, s/he has made a promise.

    You're already paying a royalty; that covers your side as far as I'm concerned, as that's what I would propose to be fair to someone who did my dirty work if I don't grant them rights to it. I would propose a higher percentage, but 15% sounds pretty significant to me.

    Talk about this to him/her. Remind them they're getting quite a fair share. You could offer them a license to redistribute your property if you feel comfortable with that - not for free, of course. If they are at all reasonable, s/he should agree. If it works out, GET A WRITTEN CONTRACT for crying out loud. (Sorry for yelling. It really is extremly important.)

    If they insist on their side, I say they consciously changed course on you. Personally, I wouldn't do that to someone I consider a friend (or anyone else, for that matter, barring extreme circumstances) - a clear case of disrespect and abuse of trust. In that case I'd follow the other Anonymonk's advice and secure what I can in restrospect. (And still get a written contract about as much as I can.)

    Be fair - to them, but to yourself as well. Try to convey your perspective and come to a friendly agreement; but don't hesitate to take whatever measures available if the other party is not playing fair.

    Makeshifts last the longest.

Re: Work for Hire Project - Opinions Requested
by theorbtwo (Prior) on Feb 01, 2003 at 08:56 UTC

    I've become convinced, many times, and especialy by recent events, that mixing your friends with your busniess is a bad, bad, bad, bad idea. It will lead to broken friendships, lost money, and lost jobs.

    That said, you've got one basic question: which is more important, the friendship or the business? In any case, what you need to do is give up.

    Hm. I suspect recent events are having too much bearing on my mood... I can't clearly express what I'm tring to say here.

    Either you're going to, best case, be out a friend, $1k, and the work you expected to get done, or out quite a bit of money. This isn't going to end well.

    Also, consider that you've probably pissed off your friend, if he reads perlmonks.

    Warning: Unless otherwise stated, code is untested. Do not use without understanding. Code is posted in the hopes it is useful, but without warranty. All copyrights are relinquished into the public domain unless otherwise stated. I am not an angel. I am capable of error, and err on a fairly regular basis. If I made a mistake, please let me know (such as by replying to this node).

Re: Work for Hire Project - Opinions Requested
by Anonymous Monk on Feb 01, 2003 at 10:17 UTC

    Hindsight is 20:20, but if money is involved, it's business not friendship.

    So far, you are a grand down. It's your idea (can you prove that?). Throwing any more money his way is stupid.

    If you re-write what he has done, he can accuse you of plagerism, reverse-engineering etc. (Whether he can make it stick depends on laywers and local law.)

    Hire a third party who has never seen the code. Employ him, under short-term contract, on an hourly rate, to re-write the code from scratch--clean-room style--with only your verbal guidance and specificatons. Set aside a 'clean room' on your premises, devoid of anything except what he requires, for him to work in.

    That ought to break the chain of ownership/copyright.

    Consult a laywer. Have the laywer write to the 'friend' formally, stating that he was clearly under a verbal "works-for-hire" contract, and that his demands are in-breach of that contract. He might cave if the money source ceases and the threat of a 'stay' on him using the code seems plausible and backed up by the right terminology.

    Good luck.

Re: (nrd) Work for Hire Project - Opinions Requested
by newrisedesigns (Curate) on Feb 01, 2003 at 15:46 UTC

    You may have to ditch your friend.

    Friends don't let friends drive drunk... and they don't cheat each other out of intellectual property rights, either. Go and talk to your friend. If your side of the story is the God's honest truth, then your friend is in violation of your verbal agreement. If your friend doesn't want to play nice, then he/she is no longer a friend. Take him or her to court and win back your rights to the software.

    Good luck to you. I truly hope all goes well and in your favor.

    John J Reiser

Re: Work for Hire Project - Opinions Requested
by Anonymous Monk on Feb 01, 2003 at 16:52 UTC
    Talk to a lawyer.


    Depending on local laws, what little you have written down (eg emails), etc it may be fairly easy to demonstrate that this is a work for hire. It need not be anything said between the two of you - it could be an internal email demonstrating your understanding at the time. Alternately it may be possible to tape a phone call where you remind your friend of what was said before and get their acknowledgement that they said this and now want something different. That may be enough to prove a legal case. Don't let your friend know that you have taken this step, but take it.

    After finding out what your legal position is, you need to negotiate a written contract. You would prefer to do that without getting overly hostile. A good lawyer likely knows more about how to get there than I do.

    Oh, and good luck.

Re: Work for Hire Project - Opinions Requested
by Abigail-II (Bishop) on Feb 01, 2003 at 23:12 UTC
    So, you screwed up once because you didn't get a lawyer, and now you're screwing up again, by asking perlmonks for advice.

    Go get a lawyer. 99% of the people here, if not more, will not know the law in your corner of the world well enough to be of any help. The other 1% hasn't read your post, or doesn't know where you are.

    You wouldn't be stupid enough to ask a lawyer to write code for you - why be stupid enough to ask coders about legal matters?


      Except s/he wasn't asking about legal advice. S/He was asking how others would perceive the situation and how they would react. And that's what I and several others focussed on in their replies.

      Makeshifts last the longest.

Re: Work for Hire Project - Opinions Requested
by Heidegger (Hermit) on Feb 01, 2003 at 12:33 UTC
    The same topic: Friends & Jobs. I find it very difficult to get a job through an advertisment in the newspaper or a web site. To get a job you must 'know someone', be a friend, be a former co-worker or similar. In theory in a liberal market the personal relationships aren't supposed to matter that much. However, when you come down to practice, it's usually the opposite. You always have to know someone to form your well-being in business.
Re: Work for Hire Project - Opinions Requested
by Starky (Chaplain) on Feb 02, 2003 at 03:15 UTC
    As other monks have pointed out, you need to get a lawyer immediately. IANAL, so consider the following simple common sense that the lawyer will undoubtedly reiterate.

    First, stop your friend from doing any more work on the project and communicate to him very directly your concerns. If he's a real friend and you stop working with him now, you may be able to salvage the friendship. If you don't, you will undoubtedly lose the friendship and possibly much more.

    Next, document document document.

    Before your memory starts to fade, write down in as much detail as possible

    • When you met (either by phone or in person)
    • Who was at the meetings
    • What was said at the meetings and by whom

    Also make sure to preserve a copy of the check and bank statement indicating that they cashed it as well as any invoicing they provided and any even remotely related documentation including memos, e-mails, or other communications between yourself and others concerning your idea particularly if they occured before the contact with your unscrupulous friend. Gather and organize the documentation for easy access, and make 2 copies: One for your lawyer and one to keep off-site in case of unforseen circumstances.

    This will protect you in 2 ways. First, you will probably want to get your $1K back (if anything, to defray the cost of the lawyer you're going to hire). If you go to small claims court, you will need to show a breach of contract or somesuch.

    More importantly, however, if your idea is worth something, you need to establish with as much certainty as possible when and how you communicated the idea to them. If they try to expropriate your intellectual property, this will serve as the basis of any legal action you take against them.

    This kind of intellectual property theft is not uncommon. Heck, Bill Gates has been accused of much the same thing with respect to the conceptual underpinnings of Windows (though his expropriation of others' ideas has been largely successful so perhaps he isn't the most encouraging example).

    Best of luck to you. At the very least, you will have learned a great deal from your experience.

Re: Work for Hire Project - Opinions Requested
by Anonymous Monk on Feb 02, 2003 at 08:30 UTC

    Thanks to everyone for their insightful and helpful replies. They've all helped me realize that my opinions on the matter weren't out of line.

    Please note that I wasn't soliciting legal advice; I agree it would have been silly for me to do so, as this is not a legal forum. I was merely conveying an experience I'm having and asking what you would do if you made the same mistake I did. I know that a lawyer is necessary, but I stupidly overlooked that standard practice because the other party is a friend. To me, it felt kind of like a prenupital agreement where each party says "till death do us part" ... but just in case... please sign here.

    This experience has made me realize that contracts are necessary for everything. I hope that everyone who comes across this thread considers this need carefully before foregoing it.

    And if my friend happens to find this thread as well, I would hope that s/he would just take it for what it is... a request for the opinions of peers.

    As an update, after several emails today, we've decided to determine licensing in addition to having a formal contract signed drawn up before any more work is done. We've expressed our concerns, they've expressed theirs, and it seems like we're on our way to an amicable and mutually beneficial relationship.

    Again, thanks for your help.

Re: Work for Hire Project - Opinions Requested
by Coruscate (Sexton) on Feb 02, 2003 at 03:26 UTC

    I think that Abigail-II did a good job at summing it up. It may have been slightly harsh, but it's a very honest answer that holds a lot of truth. For example, someone posting as Anonymous Monk was talking about getting verbal evidence. As Abigail-II said, we are not going to understand the laws as they stand in your state. If I'm not correct, will some (many, all?) states not completely disregard recorded telephone calls, saved emails, and any other media such as these? They just aren't hard enough evidence to stand in court.

    My advice (non-legal, as it is all I can offer): Do you consider this friend of yours to be an especially close friend? The actions you take now will most likely reflect the answer to that question. If you are such great friends, I doubt you will let this come between you (unless these few modules you're having written are going to be worth millions of dollars, which I also doubt). If you are even considering taking legal action in the matter, it would seem to me that you are not such great friends. I find it hard to imagine that a written contract was not pieced together considering you are paying $3000+ for this task.

    My final views: money is a terrible thing; it makes people greedy and power-hungry. Friendships get torn apart because of this greed. Sometimes, the split between 'friends' leaves both sides better off, but in most cases, it's a sad thing to witness. Think about things closely and consider all of your options before making a final decision.

          C:\>shutdown -s
          >> Could not shut down computer:
          >> Microsoft is logged in remotely.

Solution: Screw them Back!
by Anonymous Monk on Feb 03, 2003 at 03:43 UTC
    No contracts work both ways. Have them finish the work, but withhold payment. If the "agreement" was on delivery of an accepted piece of work, make sure to always have a problem with the finished product. Have them run around fixing "bugs" for as long as you can, on their dime.

    While they're doing this, work on a solid marketing plan for the product. Even if they go to market with your product, you can still beat the snot out of them.

    Eventually, they'll be as frustrated as you. Maybe they'll even demand a written agreement. If so, now's your chance! Add a stipulation of "work-for-hire", a non-disclosure, and a non-compete.

    It's Machiavellian, but so what? Business is business, as your "friend" has shown you quite clearly.

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