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You can absolutely sign away your IP rights in a contract. Unless the contract is crap it will certainly hold up in court. The contracting business would be a lot less healthy if this wasn't the case. Everything else you said is correct from what I know -- at least in California.

The neat thing about the labor laws in California (and some other states) is that they protect you from signing away lots of other rights as a full-time employee. It's difficult to enforce non-competes against former employees for example.

I write software as the largest part of my business, and I don't think I've ever been asked to assign copyright to the purchaser. I go out of my way to point out in written materials that I use licenses like GPL, BSD, and put stuff in the public domain when that's compatible with library licenses and such, but no client has ever actually asked me about that.

In my experience, people who are buying custom software don't even think about copyrights and licenses; it just never occurs to them.

It depends entirely on how savvy your clients are. Do some work for a company that has an IP lawyer and you can see the difference. The way it usually works is that you grant them a non-exclusive perpetual license to the software but maintain ownership yourself. If they want ownership you charge an additional 20% on the total cost, or whatever. I recommend contractors having their own contracts drafted by a lawyer and not signing client-provided ones. Much easier to be fair that way.

Software is not mentioned under any copyright law. Thus most ownership clauses contracts will NOT hold up in court. And as randallsquared said, most of the time ownership isn't even mentioned. I'm astonished by engineers who think this is some cut and dried issue, like NickB who points out that what Juwo mentions is "illegal" when it isn't. If it was illegal, you could make a reference a law.

Software copyright and ownership issues are murky. If they were clear cut, would Facebook be running right now?

Facebook is a great example. It depends on who you believe, but it appears that Mark Zuckerburg worked on a site that was similar to Facebook, but geared towards Harvard students. For whatever reason, he bailed and started Facebook, which was pretty much the same thing, only with a bigger scope, and better.

If he stole some PHP code, is that unethical? If he stole the idea, is that unethical? What if the guys he was working with were idiots who didn't really care, and were going to only pay attention to their rinky-dink site when they weren't at rowing practice? Is it unethical to grab someone elses idea and run with it when you know they are just going to let it lay fallow?

I agree software copyright and ownership can be murky. You're completely wrong about software copyrights not being licensable/transferable via contract. It's the basis for the entire software industry and you're claiming it doesn't even exist. Courts have found software to be comparable to literary works, making most general copyright law applicable. There's also plenty of special provisions and case law.

http://www.copyright.gov/title17/92chap1.html#117

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