RE: Article on Contracting vs Employee

Subject: RE: Article on Contracting vs Employee
From: "David Knopf" <david -at- knopf -dot- com>
To: <intrepid_es -at- yahoo -dot- com>, "TECHWR-L" <techwr-l -at- lists -dot- raycomm -dot- com>
Date: Sun, 27 Feb 2000 17:32:34 -0800

Andrew Plato wrote:

| So...basically you did some work for a client, held the rights,
| then demanded
| money when the new company took over.

Well ... yes, but I think you're missing the point.

We did a whole bunch of work for Company A. We sent invoices to Company A
for the work we did. Months went by, and Company A didn't pay. Eventually,
Company A went bankrupt. Under the contract we had with Company A, we had
retained ownership of the copyright in our work product until Company A paid
our invoices, which they never did.

Along comes Company B, which purchases all the assets of Company A in a fire
sale held by the bankruptcy court. Company B thinks it owns the work we
produced that Company A never paid for. Guess what? Company B is wrong. We
own it, and Company B has to pay us for the right to use it. This never went
to court; Company B's attorneys (I presume) simply told management they
would have to pay. Company B paid, and we gave them the copyright. Copyright
law provides strong protection.

So, to answer your question: Yes, we "demanded" money from Company B. We
demanded exactly the amount that Company A had never paid us. Because we had
retained copyright ownership, we were able to collect money owed us that we
would otherwise never have been able to collect.

Maybe I just don't get it, Andrew, but provided that a contractor has done
the job reasonably well, why should a company that *doesn't* pay the bill
get to own all the work the contractor produced?


| Most of the clients I have
| would have
| never, ever done business with you again for such actions.

Well, that may be so, but it hasn't troubled any of our clients. Anyway, how
would a company do business with me again if the company has gone out of
business?


| That
| seems to me a
| short term gain at the expense of a long term relationship.

A long-term relationship with a bankrupt firm? Hmmmmm. Sounds like something
I'd rather avoid.


| If a client pays you to work for them, they should own the work not you.

At last, we agree. And that's exactly what our standard contract says. We
transfer all rights to the client at the conclusion of the project when our
invoices are paid. If a client pays us to work for them, they own the work.


| Ethically, I think it is wrong to corner clients and force them
| to relinquish
| rights to you.

You must imagine me to be much more powerful than I am. I have no ability to
"corner clients and force them to relinquish rights." And I see no ethical
problems with protecting your rights as an independent contractor. One
effective way to do that is to negotiate contracts under which you retain
copyright until your invoices have been paid. This is hardly an unusual
business practice, even in our industry. *


| This is one of a million reasons companies find
| many independent
| contractors very annoying. A few months ago we had a client that
| had this exact
| problem with an independent contractor (not part of my company).
| They sued the
| crap out of this guy for using code he had developed for them with another
| client.

This doesn't sound at all like it was "this exact problem." The client you
refer to didn't go bankrupt owing the independent contractor a small
fortune.


| They won, he's screwed.

As they should have, and as he should be.


| Now, there may be lots of nuances to these laws. But, it seems to
| me that it is
| unfair to take money from a client in exchange for work and then
| demand that
| they give you the rights. That is like having your cake and
| eating it too.

We didn't "take money" from our client. The client went bankrupt before
paying us.


| Personally, I would not hire an independent who tried to pull
| this as I am sure
| many other companies feel the same.

I agree with you if you mean that you wouldn't hire an independent
contractor who re-used copyrighted work belonging to one client for the
benefit of another. That is wrong and in many cases actionable.

But we didn't "pull" anything. Our client went bankrupt and we were
fortunate enough to have negotiated terms under which we were still able to
recover much of what we were owed. I have no ethical problem with that.

David Knopf
Knopf Online
Tel: 415.550.8367
E-mail: mailto:david -at- knopf -dot- com
Web: http://www.knopf.com

Certified RoboHELP Instructor & Consultant
WebWorks Publisher Certified Trainer






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