IP ownership in software contract clauses
<p>Many software contract templates will say something along the lines of</p>

<blockquote>
  <p>"All intellectual property [...] that is developed or produced under this Agreement, will be the sole property of the Client."</p>
</blockquote>

<p>This can't be right. If I modify open source code as part of the work done, by nature of the open source license that code can not become intellectual property of the client.</p>

<p>If I have my own code/scripts/settings/templates/etc that I use as a contractor, and I modify those in the interest of coding efficiency in the interest of serving the client, it hardly seems correct that these assets become property of the Client.</p>

<p>Am I mistaken? Do I need to amend the clause? </p>

<blockquote>
  <p>This can't be right. If I modify open source code as part of the work done, by nature of the open source license that code can not become intellectual property of the client.</p>
</blockquote>

<p>Certainly it can. That which is "<strong>developed or produced</strong>" would be the modifications to the pre-existing code, i.e the copyright on the derivative work so created. If the base code was under a share-alike or copy-left license, then the client can only distribute it under the same license (or a compatible one, perhaps). But nothing compels the client to distribute it, and for the client's use, the client owns the copyright, without fear of any future claims by the contractor.</p>

<blockquote>
  <p>If I have my own code/scripts/settings/templates/etc that I use as a contractor, and I modify those in the interest of coding efficiency in the interest of serving the client, it hardly seems correct that these assets become property of the Client.</p>
</blockquote>

<p>Those are your work, and you can choose whether to sell the copyrights to the client or not. Again, only the  work done <strong>for that client</strong> would be covered under the wording quoted above, unless there is another provision that grants the client a license to use the pre-existing work which you modified for the job, which there probably ought to be. Or I suppose the agreement could assign copyrights in pre-existing work to the client, but that seems an odd choice, and the language in the question would not do that.</p>

<p>You and the client could agree on a different provision such as:</p>

<blockquote>
  <p>The contractor grants to the client a fully-paid, non-exclusive permanent license to use all intellectual property developed under this agreement, and any pre-existing works that may be incorporated therein. The contractor warrants that s/he is entitled to grant such license, without infringing on the intellectual property of any other person or entity.</p>
</blockquote>

<p>That wording would have the contractor retain all copyrights and other IP, but provide a license to the client to use it without further payment or expiration.  Many other ways to structure such a provision are possible, dividing the rights up however the contractor and client can agree. The price for the work might vary depending on what rights the client obtains.</p>

<p>Both forms, and many others, are perfectly legal, it is just a question of what the contractor chooses to sell, and what th4e client chooses to buy.</p>

intellectual-property open-source-software