Can Contractors File a Lien for Unpaid Work?

How About This asks: "Typically contractors are considered unsecured creditors, and if a company is having financial problems it is the unsecured creditors that usually lose out the most, or at least that's my understanding. Is it possible for a contractor that did software design and programming work to file a lien against a company for not paying for work performed? My searches have revealed references to mechanic's liens against land and property, but nothing directly with technology/computer related areas. Anyone have any links to sites or pages with this information? Or references to good (CA) lawyers in this field that can explain things (and has a reasonable initial consultation fee since obviously money is in short supply)."

Mechanic's lien?

[lynx_user_abroad]

I suspect any rights you have would be under a construction similar to a mechanic's lien.

See also: http://www.fullertonlaw.com/chapt1.htm#mechlien [fullertonlaw.com]

Check your contract

[bwt]

By default, independent software contractors own the copyright on work they produce. Unless you specifically signed over the rights, you probably still own it. Normally if they pay you, then they can use it (that's what they are buying). If they haven't paid you they may be commiting copyright infringement by using your code after you inform them that you have not authorized them to use it unless they pay. If they have revenue flow tied to the software, you might be able to threaten them with an injunction (but see below).

Even if you have signed over the rights, if they breach the contract that transfers the rights by not paying you, then the whole contract might be thrown out.

Unfortunately, if they are in bankruptcy, you usually can't sue them until they come out of it. However, if you send them a C&D letter informing them that you own the copyright and want them to stop using it and they blow you off, then they will be notching it up to "willful" violation which has hefty penalties. It is very rare for a company to completely liquidate, so eventually you have some leverage.

You absolutely need a lawyer (IANAL). Look up the names of some on some of the filings in the DVD-CCA case -- that was in California.

Re:Check your contract

[glenstar]

Also check to see if there is an AAA (American Arbitrator Association) clause in the contract. If that is the case, then you *must* use AAA for any disputes.

Go down to the courthouse and read the form....

[HotNeedleOfInquiry]

Go down to the courthouse (I know, it's harder than posting your question on slashdot) and ask the cleck to show you the lien form. Read it over, determine whether or not signing it would constitute perjury, and do the right thing.

"mechanic's leins" aren't liens by auto mechanics!

[Tintivilus]

You've fallen prey to the suggestion that legal terminology has any bearing to legal practice. The legal term "Mechanic's Lien" comes from before the era of the automotive mechanic. According to tort law, a Mechanic's Lien is that which is filed against property in posession of the debtor in which the creditor has some stake. It involves titles, etc, as explained by other posters, and is commonly called a "Construction Lien" since it's usually used by contractors.

You're thinking of an Artisan's Lien, which applies to property of the debtor that is physically in posession of the creditor. This commonly the case with auto mechanics.

So yes, it's odd -- my business law professor had a field day with this one on the exam :)

Re:Check your contract

[ScuzzMonkey]

But if you plumb more deeply, you'll find that a work made for hire [cornell.edu] is not defined so simply as you think. In essence, work for hire is not defined at all by who is paying for it, but by the status of the person producing it and any agreements they've reached with the person paying for it. Works for hire are primarily produced by employees; a work produced by a contractor, except under narrow and mutually agreed upon circumstances, is the intellectual property of the contractor, and he or she can resell it as often as they'd like.

IANAL either, but I make sure to check the definitions because I know how sneaky they can be. :)