Who owns software developed by an LLC member
Situation: One member of a multi-member LLC is developing software that the LLC hopes to use. The LLC has never been in possession of either the software or the code and the developing member has not received any compensation or payment for this software. No contract or members' agreement specifically references this software. The LLC's success depends on having this software or software like it. The developer is willing to accept termination of his interest in the LLC if necessary to preserve his copyright on the software and code.
Questions: 1) What rights, if any, does the LLC have to the software and what would it need to prove to claim those rights? 2) Can the developer member claim that the software is his intellectual property (citing that it was not developed solely for the LLC) and the LLC has no rights unless he explicitly grants them?
1 Answer from Attorneys
Re: Who owns software developed by an LLC member
Having just finished a jury trial over similar circumstances involving software and its exchange for an equity interest in an LLC, I strongly advise that you and everyone else involved in this LLC consult with competent intellectual property counsel. The legal outcome in your situation will be determined by the agreements (written or oral) made among the LLC's members -- you don't give enough facts for specific advice.