Should a technology company share source access with resellers?
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Fractional attorney for technology startups and growth-stage companies, Charlotte Corporate Counsel ·
Usually no. A technology company should share source access with a reseller only when the reseller has a job it can't do without it, and only under a written license the company drafted. A company owns what it creates only if its paper says so, and shares it only on terms it set. The reseller agreement decides whether that access is a license or a giveaway. More in my essay on owning what your company creates.
A login with no license leaves your code in play
Picture the request. Your new reseller wants repo access so its engineers can build a connector for its own clients. Saying yes takes one click. Writing the terms takes a week, so the click usually wins.
Here's what that click leaves open. Nothing says what the reseller may do with your code, or for how long. Nothing says who owns the connector it builds on top of your product. Nothing keeps the code confidential or limits who on their side can open it.
And when the deal ends, nothing makes the access or the copies go away. You find out what you gave away later: in a dispute with the partner, or when a buyer's diligence asks who holds your source and on what terms.
The same request, answered with a license you wrote
Take the connector again. This time the reseller agreement grants a license to the modules the connector touches. It covers building and supporting that connector, for the term of the deal, and nothing else. The reseller can't sublicense the code or hand it to anyone.
The connector and any changes to your code belong to you, or come back to you on terms you chose. Your partner gets what it needs to sell. You keep what you built, and you can see the edges of what you shared because you drew them.
Won't a reseller balk at all that paper?
A reseller that truly needs your code to sell your product has every reason to sign a license that lets it. The terms are what make yes safe to say. If the partner won't accept limits, that tells you something about why it wanted the access.
This is why my practice drafts Value Added Reseller (VAR) agreements alongside licensing, collaboration and confidentiality agreements. The reseller's terms and the ownership terms have to agree with each other.
Five things to settle before anyone gets repo access
Use these as a checklist the next time a partner asks. If you can't answer the first one, you can stop there.
- Name the job.Ask what the reseller has to do that it can't do with your docs, your API or a support line. If the answer is nothing, the answer is no.
- Grant a license, in writing.Put it in the reseller agreement: which code, for what purpose, for how long, and no sublicensing.
- Decide who owns what they build.Say whether changes and add-ons are assigned to you or licensed back, before a line is written.
- Cover confidentiality and data access.Treat the code as confidential, limit who on their side can see it, and set rules for any customer data it touches.
- Write the exit.When the deal ends, access shuts off and copies are returned or destroyed, with written confirmation.
Working on something like this? Tell Charlotte about your deal
Read the full argument
Reseller access is one piece of owning what you build
The same question runs through your contractors and collaborators, and the full argument is in my essay on making sure a technology company owns what it creates, across contractors, collaborators and resellers. Two questions from it come up next:
Charlotte Lynn Luu
Attorney & Corporate Counsel, Charlotte Corporate Counsel
Charlotte is a Georgia-licensed attorney who practiced at Baker Hostetler, Baker Donelson, and Kutak Rock before launching her own practice. IP ownership, licensing and collaboration terms are one of its four focus areas, which is why she writes about who owns what a technology company builds.