This is a topic that comes up quite a bit in negotiations with consultants. The consultant wants the ownership of any deliverables or other intellectual property (IP) assigned upon payment and the customer wants the ownership assigned upon delivery or creation.
If you are the consultant, having the IP assigned on payment is a huge hammer to hold when trying to collect payment. If the customer does not pay, they will not have rights to the IP which can be very dangerous. The customer usually does not have many obligations except payment and if they do not fulfill that obligation it is only fair that the customer does not get the fruits of the consultant’s labor.
On the other hand, as a customer, I will not have my IP rights tainted for any reason, including payment. Tainted IP is a very dangerous problem for companies. It can lead to acquisitions or funding falling apart or potential litigation problems. The consultant has legal remedies for nonpayment (i.e. litigation); however, the customer is in a bind if their IP is tainted.
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