Who Owns a Group Project?

A few weeks back I was a coach for Startup Weekend.  Basically it works like this: a bunch of entrepreneurs get together Friday night and each has a chance to pitch his or her idea.  The group as ajointwork whole narrows the field to about a dozen ideas and the people whose ideas were not chosen redistribute themselves among teams.  Then the teams work tirelessly over the next 52 hours to develop the idea into a working prototype which they then pitch, as a group, to a panel of judges.  The judges can include venture capitalists, consultants, and angel investors.  The team that won last year just garnered about $750,000 in funding.  So this is a big deal.

Over the course of the weekend, the same question kept coming up.  Who owns the work?  One person might have had the original idea, but shouldn’t the person working through the night to write the code have some right to the finished product?

The answer is relatively simple, but with complex consequences.  In a setting like this, where a number of people contribute to a single work, where the end result depends on each contribution, and the contributors haven’t signed any contract, it’s considered by US copyright law to be a “joint work.”  In joint works, the contributors share ownership of all copyrights.  Okay, lawyerspeak.  What does that mean?

Each contributor has an equal right to register and enforce a copyright for the work, and each contributor has an equal right to commercially exploit the copyright or license the right to exploit it to someone else.  In other words, each contributor has the right to do with the product as he or she wishes.  HOWEVER, if that one person brings the product to market and makes a ton of money, each contributor is entitled to his or her equal share of the proceeds.

I spoke with several groups with members who had no desire to continue with the project.  In that case, I recommend getting that lack of desire in writing.

As a lawyer, I’m enough of a buzzkill during Startup Weekend as it is, so I wouldn’t want to discourage the type of intense collaboration that takes place over those hours.  But, if your idea has legs and you intend to eventually bring it to market, you might want to consider the ramifications of a joint work.