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(Message started by: alexisp on Mar 16th, 2004, 8:23am)

Title: Website code
Post by alexisp on Mar 16th, 2004, 8:23am
I have a situation for you all to ponder:

Fred is having problems with a consultant he had work for him a while back.

Fred paid this consultant to produce some code for a website.  This website is up and running.

Fred then wins some business which is similar to that which the consultant did the above work for.  Fred decides to reuse the code which he paid the consultant for in his new project.

The consultant is now asking for payment for the reusing of his initial code.

N.B.  No contract was ever signed between the two parties.

Does the consultant have a case?  Answers on a postcard..

Title: Re: Website code
Post by Isaac Clark on Mar 16th, 2004, 8:51am
Hopefully Fred will learn the advantage of a written
agreement.  The lack of one has created a very messy situation.

The consultant probably owns the copyright to the code because he was a contractor and not an employee and there is no work for hire agreement (must be a signed writing) and no transfer of copyrignt (also requires a signed writing).

A court would likely find that the Fred has a non exclusive license to use the code he has paid for, but I cannot predict what a court would find the scope of the license to be.   We know the license covers the original usage, but does it cover anything more?  I think the burden of proving that it did would belong to Fred.

I think the issue comes down to what the scope of the oral agreement between the parties is and what can be proven.   I'd recommend that Fred talk over the details with a good IP attorney.  Neither you, Fred or the consultant should post enough details here for us to figure out your case.

Also be aware that this case is likely to end up in federal court if it gets to that point.

Title: Re: Website code
Post by eric stasik on Mar 16th, 2004, 10:55pm
Dear Alexisp,

Lacking any clear agreement or understanding to the contrary, my book of fair play says that you should compensate the consultant on fair and reasonable terms for re-using her code.

But not at the original terms. Asking to be paid full value twice for the same code is not reasonable. There is no rational economic justification for it.

The best licensing agreements are based on shared risk. A standard licensing deal often includes cash money paid up front (lowering the licensor's risk) and then a small percentage of the sales licensed products (exposing the licensor to the same risks as the licensee.)

I would argue that if the original development cost has already been paid, the consultant took no personal financial risk and does not deserve a high royalty on subsequent sales, but some money is fair.

Despite this conflict (which it seems to me you brought on yourself by refusing to pay) you might want to work with this consultant again. Entering into a royalty-based license agreement will change her stance towards you and make future cooperation possible. If you like her code enough to re-use it, this probably makes sense.  

Talk to an attorney, find out what your situation is, and try to work out an agreement where you both benefit.


Eric Stasik

Title: Re: Website code
Post by M_Arthur_Auslander on Mar 18th, 2004, 11:47am
Dear Alexisp,

E arly L egal A dvice I s N ot E xpensive™

Title: Re: Website code
Post by Drew on Mar 30th, 2004, 9:54am
Now, I was wondering about something similar. I was working as a webmaster, and I created a new site for the organization. They did not like the site, and made vague demands. I know that if they fire me and keep the site, I can claim wrongful termination, but can I have them take down the site when resigning? It actually was not in my job description to make the site, but I was hired by the organization. I'm just not sure of the law in this case.

Title: Re: Website code
Post by Isaac Clark on Mar 30th, 2004, 9:21pm
If you were an employee (I cannot tell from your description whether you were an employee or a freelancer) then the employer owns the web site and you own nothing if the work was done in the scope of your employment.

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