Recently, I received a desperate sounding email and the story, all too familiar, went like this:
Business owner hires web developer.
Web developer develops site including registration of domain name and web hosting on behalf of business owner.
Relations sour.
Business owner fires web developer and web developer essentially holds website hostage. Now what?Can you avoid this kind of all-too-common nightmare? When registering a domain name and launching website design/development, it is important that you as the business owner maintain not only control of website content but perhaps, even more critical, is control of your website’s intellectual property, including the code.

How?

First, it’s important to understand the legal phrase “work made for hire.” According to Copyright Law, if you employ or commission work on your behalf, the employer or the person who commissioned the work is deemed to be the author unless the parties agree otherwise. Meaning, if you hired your web designer to do work on your behalf, technically, you own the intellectual property unless agreed otherwise. Some web developers will work into the agreement that they own all rights to the site they built for you. This is why you should thoroughly review the web development agreement given to you! It is, however, acceptable to allow the developer to display your site for his portfolio, but that is a decision you should make. Still, this further warrants an agreement between you and your developer lest you’d like to embark on an expensive journey debating whether it really was a ‘work made for hire’.

Second, invest the time required to negotiate a detailed website development agreement. Your relationship will start out very well. Promises will be made, dreams built, profits quoted. Although the relationship with your web developer is ideally long term and mutually beneficial…what if it eventually sours? As hesitant as you would potentially be to consider a prenuptial agreement prior to a marriage, the same forethought should be dedicated to this relationship - my advice is to get things down on paper. Get your exit plan in place, just in case. This plan should include ownership of the website, domain name and all the code that constitutes your site and most important, know the username and password to get into your hosting account. More on that below:

Third, try to register your own domain name and source your own hosting. Even if you ultimately choose to go with your developer’s hosting recommendation, register yourself. At any given time, you should be able to log into your webhosting, if only because you can. Do not allow your potential lack of tech knowledge to put you in the position of unwittingly handing over your business’ keys to your web developer!

What should the document include? These agreements are not standard. You could be signing your rights away. Here are the elements of an agreement that you should look out for:

• If there are definitions, make sure that the definitions are industry standard.
• Beware of the term ‘proprietary’ or ‘third party’. Developers can sometimes utilize a specific technology tool to develop your site, and while the developer has a license to legally use that software, you do not. Passing the license to you is an additional cost. Certainly the developer wants to deliver a final product to you in the most cost effective manner, so he will often not pass along that license, and ultimately you get stuck with having to purchase a costly license so your website can work properly.
• Be specific in your scope of work. Clearly outline what you want done for your website and how you want it to work like number of pages, flash, links, etc. The final quote presented by the developer should be based on a specific scope of work, to minimize surprises. Note to website developers: don’t assume the business owner understands the extent of work involved or the timeframe required to complete it. This needs to be clear.
• The domain name should be owned by you as well as any intellectual property derived from it.
• You as the business owner should retain all rights to the code.
• The website developer should clearly state if he is using his own proprietary software. The business owner should negotiate to have a non exclusive perpetual license to the software.
• Most importantly, you should be able to walk away from your developer with your code in hand. Having another developer reverse engineer the code can be very costly and in most cases, you’ll have to scrap your site and start all over again.

If it’s too late…and you find yourself in the situation referred to at the beginning of the article, you can certainly argue that you retain the rights to your site, but as someone who has seen relationships go bad, this is not a case that you’d like to start litigating. You could be jeopardizing your site - at best, your site would lie dormant until the issues are resolved. Another lengthy solution is entering into an agreement after the fact, almost like a post nuptial agreement. But, let me tell you, it is not easy to negotiate between parties that don’t want to have anything to do with each other.

A last thought….even though it may be uncomfortable to “demand” a carefully thought out agreement with your selected web developing vendor, as they say with prenups, “better to be mortified for a month than regretful forever!”

Posted on Tuesday, May 12th, 2009 at 2:25 pm and is filed under Uncategorized. You can leave a response, or trackback from your own site.