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[john richmond]

I have been providing software services to one of my clients recently. It was understood that since the company was a startup ( cash was short ), that I would be paid a retainer until the system was sold.

Trouble is, that there has been nothing 'at all' in writing for ANY party describing the working arrangement. Now I am concerned that after the project has been completed, the company will say that it has paid for the creation of the software and that it wants the source code etc. To make matters worse, the company has not even paid me the retainer for the past year.

I have had words about the situation, but it seems that the management does not want to compromise at all.

Its a difficult decision, if I stop and do no more bug fixes etc, it may put many people out of work.

The big question is this ... do I own the software/source code ?

It was written in my own office with my own equipment and at whatever times I felt like doing it. Also, several parts of the system are incorporated in several other clients projects ( about 45% of the source code ). I am paid  by my own company also.

Any advice would be a great help.

[Isaac]

Here are the things that seem to be in your favor.  Based on your description you seem to be a contractor rather than an employee.  There is no written contract making the work a work for hire (and generally speaking the contracted software won't usually be a work for hire anyway) and there is no written contract requiring you to assign the work.   I would not expect that an argument that you are obligated to transfer the copyright would work.

So what's left for you client to try to get the source code is to claim that there is a non written understanding that they have a non exclusive license, perhaps a shop right of sorts.    It's pretty hard to tell how a court could resolve this issue.  Generally in this position the idea would be to try to negotiate in some certain terms to the parties mutual benefit.   Obviously as positions harden during discussions negotiating can get to be difficult.

I'm not sure why you characterize your payments as a retainer.   That term has some conotations that might raise more issues.  I assume you mean that you haven't been paid for your work as the parties had orally agreed.   Not paying you makes it more difficult for the company to assert even a non exclusive license.

I think you likely own the copyright in the software.   It is not clear what rights your client has to use the code.  

Another potential argument your client might try are that the code embodies some of their trade secrets.

[john Richmond]

Thanks for the reply Isaac.

I use the term 'retainer' very loosly, in fact on the invoices I send, it says 'Consultancy Services'.

I think the thing that bothers me the most is that several companies ( including software companies before me) have recently been taking legal action against this company for non payment. I just dont want to be next in line, or even worse, paid a small amount for the work that I have done.

I have been In talks with a competitor to sell them the software to get something out of all the work that I have done, but am not sure if I can do this.

As for my payments, everyone else in the company has been paid ( albeit a reduced amount ) , this just adds insult to injury.

I have completed one piece of software for them about 8 months ago, and it has been selling very well
( several million dollars so far ), but I have seen none of this.

I have yet to invoice for the past few months. Should I just invoice a large ( not silly large ) amount to cover my losses etc ?

thanks again

[eric stasik]

Its a difficult decision, if I stop and do no more bug fixes etc, it may put many people out of work.

Mr. Richmond,

But are not you effectively put "out of work" if your clients never pay you? Unless you are a member of the ponytail open source crowd and working for the good of the commons (and IBM) is a political mission for you, it seems entirely reasonable to me that you be paid for your programming efforts, or at least gain clear title to your work so that you can sell the fruits of your labor to someone else who can.  

If you have a negotiation lever such as stopping work until you have settled these issues, then I would recommend this as a first course of action. Pursing legal arguments after the fact will only cause you pain and suffering and weaken your negotiation position.

It seems you have to make your priority their priority, or they will do nothing until you have lost all non-legal means of influencing them.

Work stoppage is a tried and true way of getting management's attention and it is, in my opinion, the  honorable right of any working man.

Good Luck!

Regards,

eric stasik

[JSonnabend]

the ponytail open source crowd

That one made me laugh out loud.  

[Isaac]

Mr. Stasik, I like your style!

By all means John, you should send invoice the client with
a real statement of what they owe.  It sounds like you want
the creditors are lining up and I don't think you can get a
secured position.

I don't think much of building time bombs into software.  There
was some support for self help measures in UCITA, but few states
have adopted UCITA as law, and one of the more controversial parts
was arranging to turn off mission critical software in order
to get paid.  This may not be a prudent step.

[Linton Robinson]

One principal of lawsuits it took me awhile to grasp is "don;t sue, let them sue you".    If you have another market for the software, sell it.  (If you don't , all this is moot).  
If the consulting company has a problem with it, they will need to go to the expense of proving the stuff is theirs.  

[tangotiger]

John,

As I understand it in my own little world, a contract is an agreement between two parties who exchange goods, services, money, or promises.

Since you have nothing in writing, and you might appear before a judge, you will assert that you were promised x amount of $ for said software, which you said has already generated revenue for the company, and has therefore hit the market.  

What can their assertion possibly be?  That you promised to give it to them for.... what?  Nothing?  

This company will have nothing to stand on.

For such a valuable piece of property, why would you not sign something, especially since you are a consultant, and not an employee.

In any case, I would stop working today.  Your primary responsibility is to yourself and your principles.  My guess is that making millions to thieves is not one of those.