Startup FAQ 11. What’s the Difference Between a Work-for-Hire and an Assignment Agreement?

Ein minuten, bitte. Aren’t you forgetting something back there? If my company doesn’t get a work-for-hire agreement, why can’t we just get an assignment agreement later?”

As assignment is good, but not as good as a work-for-hire. A proper work-for-hire is a permanent vesting of copyright ownership in the buyer. But if there is no work-for-hire agreement, even if a full assignment of ownership is eventually executed by the developer giving your company exclusive rights in perpetuity, that copyright assignment will always be inalienably revocable by the developer after 35 years.

The inalienable right to terminate a copyright assignment is intended to level the playing field for “starving artists,” who, early in their careers, are perceived to be at risk of exploitation by corporate buyers with superior bargaining power. It gives the starving artist another bite at his former apple during, it is presumed, the acendancy of his celebrity.

A current case is discussed here.

In the technology business, 35 years might seem like way too long a time to care about. But is it?

In just a few years from now, the earliest versions of lots of PC-based software –- from which much software in current use is derived -– will hit 35 years old. Imagine for a moment the fee a former outside contractor could command by wielding the inalienable right to revoke from major software houses the earlier copyright assignment in the code on which their current offerings are based.

Failure to appreciate the importance of intellectual property in a transactional context, based perhaps on a perceived rush to get a project into development prior to the negotiation and execution of a competent work-for-hire agreement, can substantially imperil the value of your company’s intellectual property and, thus, your company itself.

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