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I've been working with an agency to develop a web site for their client. I had a contract with the agency, not the end client. I was unfortunately off my guard on this one and the contract didn't state the code ownership before or after the job is done.

Situation is this... on my end project reached completion stage but didn't go live yet (go live is a task of the agency who contracted me). Without going into reasons (there weren't any really, defo nothing related to misconduct or anything similar) they decided to 'end' the contract before the go live happened. So technically, project was finished and they acknowledged it but surely there would be issues or bugs, even during the go live, they would need help with. I know now that help is provided by other dev party they have been contracting on regular basis as their 'support'.

And all would be grand if not the fact that they haven't paid my completion invoice yet. They claim they will but the chances of this being true and a lie are 50/50. I was wondering if there is anything I can do except spamming their phones now and go legal chasing payment later. As in, would there be anything in the code ownership grounds that I could use for now?

How does the code ownership work in a default subcontracting situation, where it's not enforced or amended by specific contract agreements?

BTW, I have a similar situation with one other job, also technically completed (but practically not and passed to other dev party) but not paid for. It's not 1 to 1 scenario as with the first one but similar, hence I'd love to learn about general rules first, before trying to apply specific solution to both these cases.

  • Have you pushed them the code ever? Or they do not have it at all? I am also interested to hear what to do in case he pushed the code already. – Peter MV Jul 3 '17 at 12:05
  • I did push the code, yes. – belinea Jul 3 '17 at 12:10
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    Ouch. Then we will wait for someone to say something smart. But I suggest you try to find legal advise asap. – Peter MV Jul 3 '17 at 12:14
  • I advise you to look for legal help, we would need to see the contract but chances are you surrendered your IP rights the moment you took money from them (this happened to a fellow photographer) if not then small claims court might be an option – nodws Aug 22 '17 at 15:52
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You may sue under violation of Federal Labor law, or even standard contract theory. You need not concern yourself with ownership of the code, if all you are seeking is for payment of your already completed and preformed services. The thing of value, which you wish to obtain proper payment for is your labor. It sounds as if you already have a contract for that, so you basically have all you need. Take the contract, proof of your sent invoices, and draft a declaration stating you did the work as stated in your labor agreement, and then simply go get a judgement at the local court house. The self-help section of the judicial counsel website has all the forms you need, and aside from the declaration you will not need to draft any legal documents. Then ask the clerk at the court house which is the proper department at the courthouse to file it with (There is usually a fast-tracked department for liens and money judgments for failures to pay and collect. File one copy with the clerk, send one to the party with outstanding debt, and if they fail to pay by the court date, you'll get a default judgement and order for them to pay the debt. Once you have that, you may sell it to a collection agency, and let them worry about making the stingy customers pay the debt. All of this can reasonably done without the assistance of an attorney, just follow the directions carefully on the form you get from the self-help judicial counsel website. They may even have a collect a debt link to click on, as this is a very common occurrence and procedure.

If you are absolutely married to the idea of using the code as leverage, you may revoke the license of the stingy customer as they have not paid for that which you created, own, and licensed to them. This is a much more complicated way to go about receiving payment, sand I highly suggest hiring an attorney to do this for you. Speaking of attorneys, I am required to state that I am not an attorney, and nothing in this post may be considered to be legal advice nor should it be utilized as a substitute for the well reasoned advice of a licensed attorney, in good standing with the state bar association having jurisdiction over the state in which these transactions occurred.

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For U.S only. Federal IP law states that the creator of the IP owns the IP unless otherwise stated in the contract. I'm going to assume that your contract was silent on this and did not contain a "Works for Hire" clause. You are giving your customer a license to use the software, not ownership.

State law can not override federal law. Any language the State mandates would need to be in the contract though.

You are under no legal obligation to give up your source code. However, you may want to consider using it as leverage to get paid. If you won't need the source code again give it up, however, in the transfer agreement make sure you say that you also own the source code; joint custody. From here I think you'll need to get an IP attorney.

  • Even if "Works for Hire" is written, if the payment is not received, the contract doesn't have legal power and thus OP owns the source. Think like this, if this isn't the case everybody would sign a contract, not paying and get the code for free. – SmallChess Jul 22 '17 at 17:29
  • @SmallChess: I think you are wrong on this one. If not specified in the contract (like: this is only valid upon reception of payment). You´d still have to fulfill your side - only you´d be able to sue them for the money. And that is why not paying is not such a great idea. – Daniel Oct 5 '17 at 11:16

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