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Originally Posted by Quoth
But it's actually legalised intellectual theft.
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It really isn't.
You're free to try and negotiate a contract where you retain copyright if you want to. You can ask to be be paid entirely based on a rate for the work, or you can ask to have your remuneration partially or wholly in the form of royalties, or shares in the employing company or anything else you like.
Of course, nothing can force the employer to accept any of those proposed deals if it doesn't work for them, but over the years I've worked under all those arrangements at one time or another.
Accepting a reduced fixed salary in return for royalties or stock (or stock options) is not unusual, but it does involve the individual taking on more of the risk. It's very common in the startup sector, but many (most?) are happier for their employer to carry the risk and just be paid a fixed rate.
What isn't fair is to accept a fixed rate contract where the employer carries all the risk and then to complain that it's "theft" that you didn't get royalties or copyright ownership as well. If you didn't like it, you shouldn't have agreed to the contract in the first place.