Client liked my software so much they are copying it!
Discussion
Tricky one this, and I'd appreciate any advice.
I wrote (and am continuing to develop) some web based software. A client had a lot of initial input it terms of specifying their needs, and I went away and developed a web based graphical solution. The client liked it, and bought a licence to use it. They came back with more requirements, and version two of the product was duly developed and sold in the same way.
Now this client is but one part of a much larger organisation. The IT department of this large organisation became aware of this new application, and now want to take it under their wing as part of a corporate intranet site. All fine and dandy up until now.
They (the original client site) paid for a licence to operate the software on one site, interfacing to one single source database, clearly spelled out in the licence terms. The IT department are now openly talking about replicating the software themselves to roll it out across the business. They want to "fully understand where [my product] was getting its information from and ensure [their intranet] does the same", and "what problems you anticipate us experiencing if and when we try to amalgamate all the other sites into one". What problems? Getting sued for copyright infringement and theft of IPR perhaps?
I'm alternating between anger and despair. This is not quite Victor Kyam territory - they liked the product so much - but they don't want to pay for it - so they'll copy it themselves. They are a huge outfit, I am a struggling lone software developer watching my immediate line of business evaporate.
I wrote (and am continuing to develop) some web based software. A client had a lot of initial input it terms of specifying their needs, and I went away and developed a web based graphical solution. The client liked it, and bought a licence to use it. They came back with more requirements, and version two of the product was duly developed and sold in the same way.
Now this client is but one part of a much larger organisation. The IT department of this large organisation became aware of this new application, and now want to take it under their wing as part of a corporate intranet site. All fine and dandy up until now.
They (the original client site) paid for a licence to operate the software on one site, interfacing to one single source database, clearly spelled out in the licence terms. The IT department are now openly talking about replicating the software themselves to roll it out across the business. They want to "fully understand where [my product] was getting its information from and ensure [their intranet] does the same", and "what problems you anticipate us experiencing if and when we try to amalgamate all the other sites into one". What problems? Getting sued for copyright infringement and theft of IPR perhaps?
I'm alternating between anger and despair. This is not quite Victor Kyam territory - they liked the product so much - but they don't want to pay for it - so they'll copy it themselves. They are a huge outfit, I am a struggling lone software developer watching my immediate line of business evaporate.
It's disgraceful business practise .. i'd get a solicitor on the case asap .. will nip the bud quickly (hopefully) or if it doesn't at least you can take action early and avoid potentially large legal fees .. possibly investigate no win no fee avenues? If you have a well worded license then you shouldn't have too much trouble?
I suspect that the corporate IT people are not entirely happy that my product is seen as a big success, particularly as they weren't involved. They have invested millions in a corporate intranet that adds sod all value to the business, and they want to swallow this up and claim it for their own to justify their existance.
On the other hand they may just have legitimate concerns about my ability as an independant to deliver and support a corporate solution, but that's pure speculation on my part since they haven't even discussed the possibility.
>> Edited by victormeldrew on Thursday 2nd February 11:30
On the other hand they may just have legitimate concerns about my ability as an independant to deliver and support a corporate solution, but that's pure speculation on my part since they haven't even discussed the possibility.
>> Edited by victormeldrew on Thursday 2nd February 11:30
victormeldrew said:
I suspect that the corporate IT people are not entirely happy that my product is seen as a big success, particularly as they weren't involved. They have invested millions in a corporate intranet that adds sod all value to the business, and they want to swallow this up and claim it for their own to justify their existance.
On the other hand they may just have legitimate concerns about my ability as an independant to deliver and support a corporate solution, but that's pure speculation on my part since they haven't even discussed the possibility...
Very cynical viewpoint, but totally justified, sometimes life can seem like one big battle. Reading Scamera threads really hammers home what a sad state society is in with people justifying their existances. Thank goodness for men in sheds who tinker with british sports cars
to redress the balance. Back to the plot, I'd add to initially play it subtly and act confused and question why they are doing what they are. If it came down to it - "I'm puzzled as to (blar blar) since this a product which has been developed by myself and all design is ownership of VictorMeldrewConsultingPLCDotcomEtc" ? This may just be me being soft, so would be very wise to go with the words of Joo above in case of the worst.
egomeister said:So far yes. However I'd be reluctant to sell the software, as I hope to market it more widely in the future, but I'd be happy to parlez the site licence into a corporate licence, for suitable compensation. I'd even be happy to sell them rights to use the source code as they see fit, provided I retained IPR.
Are the company the only licencee of your software - is so would selling the product to them be an option?
A complication is that there are two other parties who might take a commercial interest; the supplier of the ERP system which my product usefully complements, and a certain Asian offshore outsourcing company, who do the intranet development work for the client. If I do release the source code I'd want to be pretty sure its use was restricted.
If they were to offer me a six figure sum they could have the lot, lock stock and barrel, and do what they like with it.
Their present attitude seems to be they get it for nothing, so getting an offer like that seems a bit far fetched at the moment though.RichardD said:I did say I was alternating between anger and despair
Very cynical viewpoint, but totally justified
. You are right though, I am going to bite the bullet, ring them up, and play the innocent. They have actually appointed a guy to oversee the corporate rollout, who might not be aware of the background either.Mate.
View this as an opportunity.
First. Quote them for rolling out *your* software. Chances are you'll knock their costs into a cocked hat for value.
Secondly: If they want to develop their own version of your system in order to bring the software "in-house" that's their business: unless you have a *patent* they can do it. Offer to help them for an exorbitant fee. Whilst you are at this you can make clear that using *your* source code is out of the question unless they pay for it. You could offer them a "source code licence"...for a fee.
Years ago we wrote a product as an add-on to ANOTHER company's software. They liked it so much they did a distribution deal with us - and set their programmers to reproducing our product as fast as they were able. Once they'd completed their own version (functionally identical right down to the API) we got stiffed.
There wasn't a thing we could do. With hindsight I would now have done a deal earlier with them to sell them the source code and our expertise at the highest rate I could manage.
View this as an opportunity.
First. Quote them for rolling out *your* software. Chances are you'll knock their costs into a cocked hat for value.
Secondly: If they want to develop their own version of your system in order to bring the software "in-house" that's their business: unless you have a *patent* they can do it. Offer to help them for an exorbitant fee. Whilst you are at this you can make clear that using *your* source code is out of the question unless they pay for it. You could offer them a "source code licence"...for a fee.
Years ago we wrote a product as an add-on to ANOTHER company's software. They liked it so much they did a distribution deal with us - and set their programmers to reproducing our product as fast as they were able. Once they'd completed their own version (functionally identical right down to the API) we got stiffed.
There wasn't a thing we could do. With hindsight I would now have done a deal earlier with them to sell them the source code and our expertise at the highest rate I could manage.
victormeldrew said:
If they were to offer me a six figure sum they could have the lot, lock stock and barrel, and do what they like with it.
Didn't read all your posts properly - sorry.
The key with this is DON'T BE GREEDY. Play innocent - but stand up for your rights. You might well be able to negotiate a one-off fee that will make you pretty happy.
We overvalued our old product...and ended up getting nothing. If we'd taken an offer in at something that made buying our source code a no-brainer we might well have walked away with a nice bonus...
Sorry if this sounds negative but someone writing a piece of software to do what another piece of software already does is fairly normal. Think how many word processors there are in the marketplace.
As long as they don't use any of your source code or infringe any of your patents then I believe they are free to do as they want.
As long as they don't use any of your source code or infringe any of your patents then I believe they are free to do as they want.
jimothy said:
Sorry if this sounds negative but someone writing a piece of software to do what another piece of software already does is fairly normal. Think how many word processors there are in the marketplace.
As long as they don't use any of your source code or infringe any of your patents then I believe they are free to do as they want.
Not necessarily It depends on the contract. You can have reverse engineering clauses written into to a contract to prevent this situation. IIRC Microsoft have this in their EULA.
I've spoken to the contact at the client. He's someone I've known for a long time, associated with the specific site I sold to, not corporate IT. I've provided IT support for that site since the early nineties, so quite a good and established working relationship there, and he really is "piggy in the middle" on this. We were pretty much in agreement; I pointed out the copyright issues, and he agreed that in any event there were probably better ways forward than re-inventing the wheel. Why throw 2 man years of development down the pan?
Unfortunately all he can do is refer back to corporate IT. Let's see if they can get over their "not developed here" syndrome, and use whatever budget they have in a more sensible fashion.
Unfortunately all he can do is refer back to corporate IT. Let's see if they can get over their "not developed here" syndrome, and use whatever budget they have in a more sensible fashion.
Why not go back and say that you would be delighted to extend their license and offer them consultancy during the rollout, then move on to dicuss terms? So far nothing you've said suggests they have deliberately set out to use your software illegally, and I doubt that any big corporation would knowingly do that. If they do, you might start mentioning FAST.
If they're talking about a corporate roll-out then they're obviously happy with your software and your ability to support it.
My approach would be to firstly clarify that their intended use is beyond the boundary of their current licence agreement and that you need to a negotiate a corporate licence.
Also offer them several days on-site Consultancy in rollout (if location is convenient for you) and mention that the source code may be for sale (ie. exclusive rights).
Personally I wouldn't trust anyone with non-exclusive licence of source code. The risk of them ripping you off is too high.
Edit: Note to self - learn to type faster to avoid someone getting in 1st and saying the same thing.
>> Edited by JonRB on Thursday 2nd February 13:17
My approach would be to firstly clarify that their intended use is beyond the boundary of their current licence agreement and that you need to a negotiate a corporate licence.
Also offer them several days on-site Consultancy in rollout (if location is convenient for you) and mention that the source code may be for sale (ie. exclusive rights).
Personally I wouldn't trust anyone with non-exclusive licence of source code. The risk of them ripping you off is too high.
Edit: Note to self - learn to type faster to avoid someone getting in 1st and saying the same thing.
>> Edited by JonRB on Thursday 2nd February 13:17
Don said:Cheers Don, advice much appreciated. "Been there, done that" is always a useful perspective (even if you didn't get the T shirt!
Mate.
View this as an opportunity.
First. Quote them for rolling out *your* software. Chances are you'll knock their costs into a cocked hat for value.
Secondly: If they want to develop their own version of your system in order to bring the software "in-house" that's their business: unless you have a *patent* they can do it. Offer to help them for an exorbitant fee. Whilst you are at this you can make clear that using *your* source code is out of the question unless they pay for it. You could offer them a "source code licence"...for a fee.
Years ago we wrote a product as an add-on to ANOTHER company's software. They liked it so much they did a distribution deal with us - and set their programmers to reproducing our product as fast as they were able. Once they'd completed their own version (functionally identical right down to the API) we got stiffed.
There wasn't a thing we could do. With hindsight I would now have done a deal earlier with them to sell them the source code and our expertise at the highest rate I could manage.victormeldrew said:
If they were to offer me a six figure sum they could have the lot, lock stock and barrel, and do what they like with it. Their present attitude seems to be they get it for nothing, so getting an offer like that seems a bit far fetched at the moment though.
Didn't read all your posts properly - sorry.
The key with this is DON'T BE GREEDY. Play innocent - but stand up for your rights. You might well be able to negotiate a one-off fee that will make you pretty happy.
We overvalued our old product...and ended up getting nothing. If we'd taken an offer in at something that made buying our source code a no-brainer we might well have walked away with a nice bonus...
). I had previously discussed, in passing, a source code licence deal, and floated a modest sum for that - essentially the difference between what I'd charged for the licence and what I would have charged had I been developing it for them by the hour at my normal rates. Just reasonable compensation for the 2 man years effort I'd put in, and not a huge sum of money - about average UK salary in fact.
This wasn't with the corporate people though, but I'm sure they were made aware of the offer. Hopefully I'll get a meeting with them shortly.
Hang on ... are you saying the parent company's IT dept approached you and asked how they could reproduce what you have written? Did they offer you anything in return for this information? If not, what planet do these muppets live on?
Obviously its dangerous to generalise, but most IT depts I've come across tend to be pretty spineless; risk-averse to the point of paralysis, always looking to blame other people if at all possible, usually lining up scapegoats well in advance, and desperate to take all the credit when something actually works. This is all good news.
Do they really, really want to take sole responsibility for a new piece of software? Especially when someone from the business may be able to say in months to come, "you tried to re-invent a wheel which we had already bought, and your new wheel doesn't work". It seems a no-brainer for all concerned to keep you in the loop:
(a) They'll roll out the product to the users sooner with you involved
(b) Your system has been in production so it will be more reliable than their mark 1 version
(c) If the project misses deadlines, they can tell their internal customers it's all your fault (little skin off your nose in the grand scheme of things)
(d) It ought to reduce their total cost of ownership
(e) If you continue to work on the product and sell it to other companies, they will be able to benefit from that development work ... so long as they don't see having this software as a major competitive advantage and you're not selling it to their competitors too.
Obviously its dangerous to generalise, but most IT depts I've come across tend to be pretty spineless; risk-averse to the point of paralysis, always looking to blame other people if at all possible, usually lining up scapegoats well in advance, and desperate to take all the credit when something actually works. This is all good news.
Do they really, really want to take sole responsibility for a new piece of software? Especially when someone from the business may be able to say in months to come, "you tried to re-invent a wheel which we had already bought, and your new wheel doesn't work". It seems a no-brainer for all concerned to keep you in the loop:
(a) They'll roll out the product to the users sooner with you involved
(b) Your system has been in production so it will be more reliable than their mark 1 version
(c) If the project misses deadlines, they can tell their internal customers it's all your fault (little skin off your nose in the grand scheme of things)
(d) It ought to reduce their total cost of ownership
(e) If you continue to work on the product and sell it to other companies, they will be able to benefit from that development work ... so long as they don't see having this software as a major competitive advantage and you're not selling it to their competitors too.
Lots of good advice, cheers guys!
Pete, JonRB, I was kind of hoping to progress along the corporate licence/roll out consultancy route to keep me gainfully employed for a while.
There's actually a little more to it than that as well; there are essentially two elements to the software - data aggregation, and the web UI. The data aggregation side is complicated by the client having (despite their best efforts) a few disparate data sources. Two main flavours of the same ERP, plus a couple of older legacy systems (one of which I also support, handily). To roll out successfully the data aggregation side will be specific to each data source. The UI would be common.
It's the intent of the corporate IT people that worries me. It's hard to sell anything to someone who's not listening. Still, nothing worth having ever came easy, eh?
Pete, JonRB, I was kind of hoping to progress along the corporate licence/roll out consultancy route to keep me gainfully employed for a while.
There's actually a little more to it than that as well; there are essentially two elements to the software - data aggregation, and the web UI. The data aggregation side is complicated by the client having (despite their best efforts) a few disparate data sources. Two main flavours of the same ERP, plus a couple of older legacy systems (one of which I also support, handily). To roll out successfully the data aggregation side will be specific to each data source. The UI would be common.
It's the intent of the corporate IT people that worries me. It's hard to sell anything to someone who's not listening. Still, nothing worth having ever came easy, eh?
ATG said:Actually its worse than that. They appointed someone from the original client site (non-IT) to manage the corporate rollout, and asked HIM to pump me for information! Spineless, as you rightly say!
Hang on ... are you saying the parent company's IT dept approached you and asked how they could reproduce what you have written? Did they offer you anything in return for this information? If not, what planet do these muppets live on?
Points a-e; excellent, this will all help crystallise my pitch for when they do eventually decide they'd like to talk! Cheers!
p.s. There are many rough and ready ways of valuing a product; your development cost, risk adjusted estimate of what it would cost them to develop it, a percentage of the value it will add to their business. What it cost you to make (2 man years) is irrelevant to them, and therefore ain't a basis for negotiating a price unless you just throw it in as emotional blackmail. The relevant valuation is the second one (if it's greater than the third, then one assumes they wouldn't be entertaining the project). Two man years of your time could easily turn into three times that much if they try to do something in-house with a project team and the usual cock ups. Let's play fantasy prices: Total annual cost to a firm of a worker earning £25k, maybe £40k? 40k * 2 * 3 = £240k.
p.s. Ouch ... your last post suggests they are proper bastards ... probably still muppets
>> Edited by ATG on Thursday 2nd February 13:58
p.s. Ouch ... your last post suggests they are proper bastards ... probably still muppets
>> Edited by ATG on Thursday 2nd February 13:58
Good point.
Chances are it will cost them more to develop internally, or it won't be as good. Or both. I'm not just blowing my own trumpet, the one time I have met the corporate IT to demo the system they freely admitted they couldn't have developed it themselves either to the budget or the timescales, even if they'd had the idea.
It has already demonstrated payback on the site using it, who reckoned it had paid for itself within weeks in terms of savings of management time prepping figures, and that's without factoring in the performance improvements. If I said that their standing with their major customer had improved considerably, that they were openly attributing this improvement to my system, that I was treated to a jolly at Goodwood by the client AND their customer where I was praised (to an embarrassing degree) as some sort of business Messiah, and finally that the clients customer is clamouring for access to this system themselves, you might get the idea that its actually worth quite a lot to them. Especially if I mentioned the client or their customers names, which unfortunately I can't.
I must have knocked someone's nose way out of joint in corporate IT I guess!
Chances are it will cost them more to develop internally, or it won't be as good. Or both. I'm not just blowing my own trumpet, the one time I have met the corporate IT to demo the system they freely admitted they couldn't have developed it themselves either to the budget or the timescales, even if they'd had the idea.
It has already demonstrated payback on the site using it, who reckoned it had paid for itself within weeks in terms of savings of management time prepping figures, and that's without factoring in the performance improvements. If I said that their standing with their major customer had improved considerably, that they were openly attributing this improvement to my system, that I was treated to a jolly at Goodwood by the client AND their customer where I was praised (to an embarrassing degree) as some sort of business Messiah, and finally that the clients customer is clamouring for access to this system themselves, you might get the idea that its actually worth quite a lot to them.
Especially if I mentioned the client or their customers names, which unfortunately I can't. I must have knocked someone's nose way out of joint in corporate IT I guess!
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