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I built a very successful app for a client. There was no language as to ownership in the contract, and no "Work-for-hire" language.

The project creeped way out of scope, but I had an hourly rate that kicked in when over my estimate, and they paid right away. I didn't see much gain in re-doing the contract, so I let it be.

I installed it, and it's been hugely successful for them - mostly automating and detoxing from paper, and digital sign-off/review of $$ transactions.

After few months, he asked for a copy of it for his other firm, as well as asking of me to not provide software to any of their named competitors.

Now he's asked for the source code and a perpetual license. I countered with either a large lump sum price for the source code, or a yearly licensing of 1/5 the price of the lump sum buyout.

Did me installing it on their system 'imply" a perpetual license for them? Or would I still be able to license it yearly?

I'll likely be heading for some legal help on this also - just wondering if any devs had this type of situation out there!

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    Where abouts are you based, and is your client in the same country or elsewhere?
    – Valorum
    Jun 29, 2021 at 22:09
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    The fact that they're asking for perpetual rights for their other company would strongly suggest that regardless of what's in your contract as worded, that they think they need to get the licencing fixed with you in order to start and then keep using it. That stands very nicely in your favour
    – Valorum
    Jun 29, 2021 at 22:12
  • thanks! in nyc -usa. I'm wondering if me having installed it on their system, implies a license of some type/term?
    – donnyc
    Jun 30, 2021 at 0:10

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Before you look at licensing, think about asking for a support agreement. If this software has gone significantly out of original scope, then there is a high probability of changes coming. Keeping the software up to date could be a far greater source of income than any licensing.

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  • thanks David - I was thinking a hybrid of license and support, They asked for perpetual license and the source code (and me not selling it to any of their competitors. I countered with a yearly license ( or lump sum buyout) as well as a monthly retainer for maintenance/support.
    – donnyc
    Jun 30, 2021 at 16:16

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