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Who Owns Source Code When a Company Folds?
pipeb0mb asks: "A few years ago, I worked for Chilliware, Inc. as the 'Technical Development Manager'. Some of you may remember us for the software iceSculptor, Mohawk and Mentor. Chilliware folded rather quickly and harshly back in May of 2001 due to money issues. Within days of the first layoff, everyone was gone, from the CEO and VP's to the receptionist. Now, years later, I've been digging through some old CDs, and am reminded that I still have the final production source code for the products we released in the retail channel. I've attempted to contact several folks over the past couple of years to gather information about the software and who owns it now. To no avail though. Either I get an 'I don't know' or 'No one' from the dis-interested parties. I feel like these programs are my children that never got a fair shot. I hate to see so much work wasted and lost to the ages. So, Slashdot: What do I do with this source code? It's a great deal of well commented and well written code, performed by over 100 developers in a former Soviet Republic (who formerly worked with Boomerang Software). Where do my binary children go now?" As things are now, if a company folds, the code is buried and forgotten unless someone buys the rights to it, before the source code is lost. This issue was discussed a long time ago and there didn't seem to be much in the way of answers. Have 3 years made any difference?
In short, contact a lawyer
I can't say that I don't give a fuck. I've just run out of fuck to give.
... "ask a lawyer".
But failing that, try to find the principals of the company, the original owners. They owned the assets of the firm. If they don't want it try to get a "whatever, do what you want with it" from them before you try to sell or publish it.
The man who never alters his opinion is like the stagnant water and breeds Reptiles of the Mind -- William Blake
I do.
I will license it to you for 699 dollars.
I don't need no instructions to know how to rock!!!!
Post it online, wait to get sued.
It's a great deal of well commented and well written code, performed by over 100 developers in a former Soviet Republic ...
Well, we all know that in Soviet Russia, source code owns YOU. So maybe you should ask IT.
Tuus crepidae innexilis sunt.
The author of a Mac game called Glider worked for a company called Casady & Greene. He seems to believe that since the company went bankrupt, the rights have reverted back to him as the author.
I guess this would hold true so long as they didn't sell or assign the rights elsewhere.
Even then, regardless of the answer, you can still be taken to court and it will be up to a judge.
I'd advise that you find out who was in charge of the liquidation of the company, and approach them. They would be in charge of the assets. See if they were sold on. If the liquidator still has possesion of them, offer a modest sum ($100 or something) to buy the rights to it off them. The liquidator will probably just pocket the money anyway.
If someone bought the rights when the company was liquidated, see if the liquidator will tell you who, and approach them.
-- There are three kinds of mathematicians: those who can add and those who can't.
My advice? There's no way you can just release this without getting an OK (a legal OK) from whomever owns the copyright (this may be the company that auctioned the corp's assets for all you know). If you're the only known holder of this code, you're out of luck. You already posted to /. =) Otherwise you could have just released it to the wild without a peep using Kazaa or Freenet or something like that. Not ideal of course, but it would be better than having it sit on a CD for the next 20 years or whatever the IP laws dictate, and it would have been nearly impossible to trace it back to you, I think.
Tough situation, for sure.
Since I was a founder of a company that went under, usually what happens if the company just "goes bankrupt" is that they do NOT go "bankrupt," as that implies that it's seeking legal protection from its creditors. Rather, it undergoes a voluntary liquidation.
During a liquidation, all "assets" are divided up amongst the shareholders of the corporation in some way that seems fair to the shareholders based on their share classes. In our case, the Series B investors (who had preferred stock) chose to give a kick-back to the Series A investors (who had preferred stock, but not as preferred as Series B), out of good will, though they had no obligation to do so. However, and this is a kicker, this only works with fungible assets (such as stuff that can be sold).
If the source code was not sold before liquidation, meaning that it is not a fungible asset, then what happens is that rights to the IP get divided up amonst the shareholders of the corporation in a way appropriate with the corporate governance of the liquidation. In other words, if Series B investors got 80% of the loot, and Series A investors got 20% of the loot, then the exact same proportion happens with the rights to the source code.
So in order to get it, you essentially have to find everybody that has a proportional right to the source code if it's not been seized by someone in the liquidation, and convince them to give over their rights to it. This usually means finding every shareholder in the corporation, and figuring out who owns their stock. It's going to be really rough.
What do I do with this source code? It's a great deal of well commented and well written code
Well written AND well commented? Put it in a museum, dude!
You are of course correct. Again, asking /. for legal advice isn't sound advice. However, I'll tell you what would happen, basically. If you tell that lawyer you have something from this company of value, it should technically belong to the company's creditors - I assume it went out of business for a reason, correct?
What will likely happen is that the lawyers for that company won't be interested in developing the software - but they'll be damned if they'll just give it to you and see you do something with it of value. Likely, they'll tell you to fork over the code and decide to archive it in case anyone wants to screw with it. No one likely will.
There are basically three options you have. The first two certainly involve getting a lawyer.
1. Buy it from them. Problem there is that they will not know how to attach a value on it, so they will pick an arbitrarily high one. Remember, if no deal is struck, they get it back once you admit to having it. They also don't want to get fired when they sell it to you for too little. Not reaching a deal won't get them fired, and burning the code is probably best for them.
2. License it from them. Give them some money up front and a cut of whatever you get. This will cut your upfront costs, but they will likely want a huge cut. However, they won't be as afraid, at least, since they get more money if you do. Nobody looks too bad.
3. Pretend you don't have it, and do a "dirty room" re-write of it. Effectively plagiarize it and assume that anyone else involved with it won't remember, won't notice, etc. Then, if you do anything of value with it, worst case scenario is they sue you, you settle, everyone's happy. Bet you wish you hadn't posted this now, huh?
The problem is that, as the article poster mentions, this is a software dead-end, and it's very hard to revive dead code. The current owners don't want to look like idiots when they get pennies for valuable code that they didn't correctly value. They'd rather bury it, which is your problem now.
Note that this is not to be construed as actual legal advice. You'd have to be an idiot to listen to me, particularly since option 3) is pretty illegal. ;)
-Looking for a job as a materials chemist or multivariat
You're thinking of another company that siezes to exist. Chilliware has merely ceased to exist.
My next sig will be ready soon, but subscribers can beat the rush
Well, from this line...
"Some of you may remember us for the software iceSculptor, Mohawk and Mentor."
I'd say Troy McClure owns it.
There are 01 kinds of cars in the world. The General Lee, and everything else.
Software sucks. Open Source sucks less.
Actually, there is some benefit to asking for this kind of advice - but not to determine the course of action. Rather, for getting an idea of what's possible before seeing your lawyer.
If I were to get divorced (I'm not even married), I'd be talking to my divorced friends to find out what I can expect on the legal front - not because they're legal experts, but because they have experience dealing with my situation. They might be able to help steer me away from bad advice, or help me know what questions I need to ask.
I definitely wouldn't "ask Slashdot" when I've been caught with 40g of cocaine and a 12 year old prostitute in my car. But it is perfectly germane and sensible to ask a bunch of coders about their experience and advice in a situation dealing with writing software and the legal ownership of that software.
That's a one-way ticket to jail. If he has those disks unknowingly, it's a potential oversight. However, if he 1) finds them, and 2) contacts the rightful owner, he's obligated to return them immediately. I suspect they'll record the conversation, and no judge/jury on earth will go for the old "I lost them" routine. Well, maybe the OJ jury.
Remember, his copy is legal under fair use (backup copies made while employed)
The hell! He doesn't have a license to anything he used as an employee. When he quits (or is fired, or laid off) his rights to use company property ceases. I've seen the fair use law, and it ain't that. If MS fires me, can I do whatever I want with a Windows CVS, like develop it into another product? Uh, no. That isn't fair use.
and the only thing the owners can do is compel him to destroy it. They can't compel him to give the code back - he doesn't have a relationship with them anymore.
Legally they sure as hell can. He has their property. Period. They can't threaten to fire him, but he can go to jail.
-Looking for a job as a materials chemist or multivariat
Well, they do, actually. There are preferred creditors, less preferred, and non-preferred. The first are banks, the last something like common-stockholders. There is a VERY well-defined pecking order - basically, the higher ups basically get what they want until the debts are satisfied, and if there's anything left, you go down the chart.
The problem here is this guy's code is like Grandma's shitty costume jewelry - it wasn't worth Grandma putting in the will, and before she died, no one really makes a fuss about it. They likely didn't even notice it when the family divvied up Grandma's grap when she died. But if anyone actually wears Grandma's shitty old necklace to a family reunion, say, then everyone's going to get all pissed asking you how come you got Grandma's necklace. Then, the oldest sister wants it an pulls rank, and a nasty fight ensues. Yay.
Same thing here. Everyone assumes that code is comepletely worthless, and doesn't even want it - that is, until you come along, mention that you have Grandma's necklace from the estate (ie, the source code from this project) that you weren't really entitled to. Now, everyone else ahead of you in the pecking order (ie, the preferred creditors) wants the code, simply because it now might have value. Remember, they don't care if they make money off of it - but if you do, that means they could have, and somebody's ass is grass.
And, if there is no hope for this particular after the fact problem, or for corporations to put in general legal safeguards for tidy disposal of property without the need for expensive lawyers, then is there some small "sunset" clause that software developers could put in their code to ease the transfer, like a quit-claim that goes into effect if the corporation dissolves and no creditors assert any rights for a period of one year.
I like that idea - problem is, I don't think it's enforceable unless it is agreed to (probably ahead of time) by every potential lienholder/creditor of the company, down to common stockholders. You could make it boilerplate. The problem is that creditors don't want to give things that might have value away, and would rather just have it "just in case." Most likely, they'll just assert their rights over all software in general, in case something comes up they didn't know about.
-Looking for a job as a materials chemist or multivariat
Yes, that was us. That was me, in fact.
I like to think that since I managed to get 3 out the door, it was only a partial failure. Vanity++
So what did you do when you were found with 40g of cocaine and a 12 year old prostitue in your car? My uh friend is in a similiar situation.
Found this
And this containing contact info (may be out of date)
If Amazon still sells this then someone is connected to the money and that means trouble... So forget droping it in the trash and I don't know you...