solfware ownership

This is one of the areas where lawyers are useful in a win-win way. If both groups work together on this, creating a contract specifying how the product will be developed and managed, then both groups could make money.

Of course, if both groups don't work together, then only the lawyers will make money.

I have worked with a Dallas Texas software development firm (Emprise Solution Partners) that takes an interesting approach.

All new development work done for a client belongs to the client. However, they do a license agreement on elements thatcould be used for another client. In some instances, the royalties from these license go beyond covering the original client's development cost to actually generating a revenue stream.

The development firm gains two ways - happy clients that helps expand business and shortened development time and costs for new clients. Its a 3-way win.

Ownership of the finished product works as follows. Client owns all original pieces developed for them. When pieces are reused under license, the client who owns the piece reused receives royalty and the new client owns the finished product.

Bill Gates and Paul Allen, who had a little startup software company called Microsoft, were hired (contracted) by IBM to write an operating system for their new desktop computer. The resulting product, which was delivered to IBM, was the operating system called PC-DOS. The agreement between IBM and Microsoft, however, while it allowed IBM to use PC-DOS for their computers, also stipulated that a competing version could also be licensed to others. In short, Microsoft retained the licensing rights to the product, albeit by another name - MS-DOS.

That's a rather simplistic look at what was, most likely, a complicated legal agreement. But, as the great Paul Harvey says, and now you know the rest of the story.

My advice to you, seek out agood software licensing attorney (who will look out for your best interest) to write a contract (and to negotiate with their attorney) - and get everyting in writing.