Between an interaction on Twitter and a recent entanglement with a client, it
makes sense for my first post to be about intellectual property rights.

I will make the argument that strong IP rights:

- Help the "little guy," namely independent contractors, not harm them

- Complement the shifting change in the labor model, especially as it relates to
  software

- Encourage the growth of, and investment in, the open source ecosystem

## Independent workers

Individuals who perform work on a contract basis are known as "independent
contractors" or ICs, which is opposed to an employer-employee relationship.

Though the independent contractor status is often abused by companies who expect
workers to perform the job of an employee while calling them a contractor for
tax purposes (called "misclassification"), there *are* rights that ICs gain as
part of this trade-off which employees do not have.

### Basics of copyright and ICs

One of the main differences between an employee and a contractor is that,
generally:

- When an employee creates intellectual property, the employer will own it
- When a contractor creates intellectual property, *they* will own it unless
  explicitly assigned or licensed away.

When you write a[n original] piece of code¹, you have created a "literary work"
which belongs to you unless you have explicitly assigned or licensed it away,
just as if you wrote a book or a play (or even an original choreograph piece,
according to the Copyright Act).

>  ¹ For protection to apply, the code must be an *original work*, i.e. also be
>  non-obvious enough to be copyrightable.
> 
> `const sum = (a, b) => a + b` is too unoriginal as to carry copyright
>  protection.

This implies that the process of *being paid to develop software* and the
process of *assigning that software's ownership to a client* are disjoint, but
closely related, processes. Engineers need to be paid for their time in order to
work, and then clients can take possession of the final IP when it is finished
and the job is done, for a separate fee.

Though it is possible (and common), I am generally opposed to assigning IP in
advance outside of extremely rare cases, as ownership of the underlying IP is
one of the few leverage points ICs have in their work arrangements. Though
there's a price for everything, the premium it should cost to write this kind of
blank check should be so large that it's rare a company would want to pay it.

**The main point being that, as an independent contractor, you retain ownership
of any intellectual property you create unless you explicitly agree otherwise.**

See [**A Recent Example**](#A_recent_example) below.

## The digital labor model

![](https://fred.stlouisfed.org/graph/fredgraph.png?g=FVwK)

The lyrics to *The Workers' Song* by Ed Pickford, as performed by Dick Gaughn:

https://open.spotify.com/track/1KFxcj3MZrpBGiGA8ZWriv?si=b175040c4af34fde

> In the factories and mills,
>
> In the shipyards and mines,
>
> You’ve often been told
>
> To keep up wi' the times,
>
> For your skills are not needed,
>
> They’ve streamlined the job,
>
> And wi' slide rule and stopwatch
>
> Our pride they have robbed.

## Open source investment



Software and Intellectual Property Rights

## Redaction

This document is partially redacted. The SHA256 of the unredacted text is:

```
993e61fe0524e9cd642eaab636ea5a90793c545beffb685804f6407df958bbbd
```

## Background

███████ (an ███████) contracted me over the course of a few
months, during which I produced ███████ repos containing original code,
folders of notes, etc., all of which was original and written and therefore
copyrightable. The intention is always to assign it to the company contracting
you, as this will need to become their IP, but it did not come up
mid-development.

I honestly immensely enjoyed my work, the flexibility they afforded me, and my
working relationship with ███████, but the founding team seemed
inexperienced and problems eventually came up. I offer details not to bad-mouth
the company (hence the redactions) but mostly to explain how strong IP rights
protected my interests. Almost all of the negative incidents described here
arose out of naive incompetence on the founding team's behalf, rather than
actual malice.

The first major problem was that they ran into issues with payroll and failed to
pay their invoices on time for a period of nearly ███████. The resulting drama
ended with us terminating our relationship—though it was not very bitter, we
simply decided we could not continue working together. I still consider myself
tight with ███████.

When I asked them whether they intended to throw my work out or what their plan
was with the unfinished work, ███████ said something to the effect of "No,
we're going to finish it on our own." When I explained that they could not do
that until the IP was assigned, they responded that "didn't think that's how it
works." I was an IC working on an oral contract, so it was absolutely how it
worked. Despite the prior issues, this was where I started to feel like this
team did not know what they were doing very well, and it was complicating my
ability to wrap this relationship up.

## Wait, actually, we *do* need that

Within a few days, I heard back from ███████, who told me that I was right,
that they *did* need me to sign an assignment agreement (which they had
emailed), and also indicated that they would be unable to close their ███████
until they had gotten signatures on the *███████* of these agreements they had
sent out. It seems like there was one very pissed off lawyer that day when this
founder mentioned something about a contractor talking about IP assignment, only
to find that the company had hired "███████" of contractors without owning the
underlying IP.

Who could possibly know how much of that code is in the codebase now? The issue
with this is that if this company is using even *one line* of original
contractor code (or one line written by someone else *derived* from contractor
code) without explicit assignment/license, they are violating that author's
copyright. This is the reason why investor diligence for software companies is a
stickler for IP rights: If we are investing in a software company, we are
ultimately investing in its intellectual property, and if we can't be sure that
you own 100% of it, it raises issues.

Hilariously, the offer to assign the IP was for less than 1% of the cost that
was paid to develop it. When I told ███████ I would redline the agreement
and send it back, they told me that they "were not in a position to do
revisions." I was actually shocked: Here we are, our relationship over, they
need me to sell them my property in order to close their round, as well as take
on additional liability by making various representations and warranties to
them, and they say can't do revisions.

## Ball-busting ensues

I was happy to assign the IP to them until this point; now I would need to be
buttered up. So, for for the first time, I committed to busting their balls just
to set the record straight about who does and does not need who to do what—which
is an option you do not have if you do not own the underlying IP in the first
place (as you would not in standard employment arrangements).

My counteroffer was 20x what they asked, and it expired after 72 hours of no
response. If they reach out again, it will be at least 10x that. If they proceed
otherwise, our relationship is over just as it was before they reached back out
to me asking me to take on additional obligations.

**If you need contractors to release IP, remember that you're the one convincing
them and not the other way around. If you don't like it, hire an employee.**

## Resolution

I expect that deal will eventually be closed, mostly because the alternative
would mean putting investors at risk (bad idea lmao), and if it does they're
going to walk out of it bloodied (paying ~30x more than I was originally going
to release it for until they became uncooperative).

For me, I was prepared for this scenario, and am exactly where I would be either
way, and I was well-paid to develop software that I still currently retain
ownership of, mainly `███████`, which is great. If I do something with
that software and monetize it, the profits are mine to keep.

They, on the other hand, own nothing until we reach a new (and separate)
agreement, and have to be concerned about investor diligence and the issue of
contamination. Even if they throw out all references to the work that was
produced, the issue with not getting IP assignment from contractors is that if
that work is even *relied on* indirectly to produce derivative work (say, a
feature based off a subconscious memory of a contractor's notes, even
accidentally), that infringes on the contractor's copyright.

Thus, you should always expect to get your contractor IP assigned to you, and
contractors should always remember that they retain ownership of their software
until they assign it.

Recent Engagement with a Client [REDACTED]

The idea was raised on Twitter the other day of shorting a person's future, a pretty evil idea that we will unpack in this post:

https://twitter.com/anothercohen/status/1420472533329928194

```latex
\documentclass{standalone}
\usepackage{pgfplots}
\begin{document}
\begin{tikzpicture}
  \begin{axis}[ 
    xlabel=$x$,
    ylabel={$f(x) = x^2 - x +4$}
  ] 
    \addplot {x^2 - x +4}; 
  \end{axis}
\end{tikzpicture}
\end{document}
```

C. Lewis

hi@ctjlewis.com

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Recent Engagement with a Client [REDACTED]

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