We Shared Profits. Does This Include Intellectual Property?

[verybusyant]

We have just signed initial contract to share profits from our project. All we done is to say that the profits will be shared as a proportion.

Lets say it is internet project and that the software produced to create the described project will be used somewhere else as well.

Lets say that the initial project will not work but the software created will be used in some other project that become success.

Does the initial contract will be still in force? The contract only specify a share of profits. Is the profits made from transferring intellectual property from one project to another will still apply.

Thanks again for Your help

[Hypognosis]

Is this a case of them promising the workforce profit-sharing -instead of- paying a proper salary?

Call me a cynic, if you will, but 'the profits' could be defined within the contract as only relating to the first project, which then mysteriously flops but someone takes all the work you and your colleagues have done, sets up project #2, shared between just a handful of people. Hmmm.

[cassa333]

It depends on the wording of the contract doesn't it.

I would say that in the face of no other information that the profit would likely be a cash value from the project and not another project.

Who ownes the intelectual rights to the software? The software developer or the 'company' that the project belongs to?

[verybusyant]

Thanks for that. That is what I have been thinking. Everything needs to be split in proportion as we discussed. Be honest and proper. Where can I find proper contract that include intellectual property and is not leaky.

[verybusyant]

A the moment we only shared a profit that might happen between couple of people. Very simple two sentences. Is this any good?

[Hypognosis]

// Is this any good? //

You make it sound like this is some kind of 'home-brewed' agreement. Since you are asking an internet forum, I take it none of the partners can afford genuine legal advice, at this stage? How will you know whether any of it is going to be legally enforceable?

My personal opinion is that contracts are for when a group of - otherwise equal - people cannot trust one another to only take their fair share of something worth having or where there is no inherent cause to trust the other party to perform their share of the bargain, such as the employer/employee relationship.

For instance, the work could be divided up by the project leader in such a way that, even if you arranged for 100% intellectual property rights on the pieces code you write, none of it performs useful functions until it is integrated with the code your business partner(s) write. So you won't be able to sneak away and make a fortune with solely the pieces you built. ;-)

I have not seen movie 'The Social Network' but I gather the plot revolves around a "gentleman's agreement" gone wrong, or a contract that was too sloppily written - because they were skint students and couldn't afford to get a proper lawyer to write it.

[verybusyant]

Hypognosis, thank You very much for the answer. I truly agree with you.
It is home-brewed. I thought any document will be enforcable at least in some part therefore it might help. We all understand language and we signed i would think reasonable short contract.

My life experience tell me to sign the contracts and be confident not to worry about what happened in 'social network'.

Anyway it is as You say worth thinking about lawyer advice.

Thanks