We are a software development company based in NJ. One of our clients has blocked access to website/applications that we have been working on for over 3 years now. We have not been paid for about 4-6 months worth of work and now they have blocked our access to their server. We have sued them for non-payment and in return they have put in counterclaim.
However we wanted to know if we can go after them for Copyright Infringement and Claim that the software code is our Intellectual Property. We never had any contract/agreement in place nor we ever signed "Work for Hire". Please advise.
The Agreement will define the ownership interests in the code. Counsel representing you must be consulted regarding copyright ownership and any possibility of infringement.
Yes, there is a possibility that you could sue for copyright infringement. There are likely other viable claims here as well. You need to find an attorney and discuss all of the relevant facts with them.
I seriously doubt if you have a claim for copyright infringement. Even if you had no written agreement, at the very least you provided an implied license to your client to use the software and applications that you developed for it. This sounds like a contract dispute, not a copyright dispute. It belongs in state court, not federal court.
There are available forward-looking strategies available to you that you should consult your counsel about. While there may not presently be a copyright claim, one could exist in the future depending upon how you handle the situation now.
I agree with Attorney Ross.
I think the rule is clear that a licensee’s breach of a COVENANT in an implied copyright license does not rescind the authorization to use the copyright work, but rather only provides the licensor with a cause of action for a breach of contract. In this situation your client is the licensee [of the copyrights in the works you created and published on its website] and you're the licensor [of those copyrights].
For the breach of a copyright license to give rise to a copyright infringement claim the breach must be of a CONDITION PRECEDENT to the formation of the implied license.
In short, I think your contract cause of action for non-payment subsumes the wrong of continuing to use your copyrighted works without paying for them as promised. Your trial counsel MUST discuss this wrinkle with an intellectual property attorney. Good luck.
If you signed no agreement restricting their use, and they paid you for software you develop specifically for them, they will argue that it is their property. This is what happens when you work for 3 years on a non-contract.
I would agree that your IP claims here will likely be non-starters. It sounds mostly grounded in contract law and they still receive an implied license to use and enjoy the work product for all its intended purposes even if you still retained the underlying IP rights to it.
But all that said, trying to handle the law suit on your own seems very ill-advised. I suggest that you consult with a lawyer in private and discuss your case and objectives in more detail. You can start by calling around to several for a free phone consultation, get some insights then pick the best fit to work with.
Best regards,
Frank
Natoli-Lapin, LLC
