Who Owns Source Code When a Company Folds? 490
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?
Like with BeOS (Score:4, Interesting)
Did someone... (Score:3, Interesting)
The Owner or Reciever (Score:2, Interesting)
company owner or the "Corporation" under
the Receivership. If the company was public, then a Bankruptcy proceeding will enumerate those assets, including code and the trustee then has the right to dispose of them how he sees fit in the best interest of the shareholders. If the company was private, who ever owned the company and their heirs owns it unless they sold the rights to someone else.
I worked for a company that went Chapter 11, they still owed me money and I had the trustee come after me because work I did had tangible (read salable) benefit to clients left out in the cold. So, I cut a deal with the trustee, got my back money and some cash for finishing some work and making modifications to stuff already done.
Are you this guy? (Score:5, Interesting)
Interesting (one might say prescient) comment [slashdot.org]about Chilliware from Bruce Perens in that discussion.
Cheers!
Immortal Code (Score:5, Interesting)
Re:In my experience... (Score:3, Interesting)
Someone threatened me with legal threats one time (Score:4, Interesting)
My agreement with the company included my rights to keep a copy of any and all software I developed for the company and to use it as I wished.
In fact, some of the software came from a large engineering company where I had worked previously. In that case, I had asked for and been granted permission to keep and use a copy of a specific set of programs I had written.
At one bankruptcy hearing, I gave the secured creditor a good copy of all the software. He asked me where I got it and I told him I made him a copy from my copy.
The secured creditor went through the roof and started threatening me with lawsuits for "illegal conversion".
My lawyer said that I while I would probably prevail in court on the matter because of my agreement with the president of the company, it would cost me thousands to do so.
I'm pretty hard-headed. It didn't matter that the software had no commercial use except for a very narrow segment of companies (there were about three in the United States that did the same thing and they already had their own software), I refused to give it up and wasted a lot of money on lawyer fees to keep it. The bad thing is that my lawyer took it upon himself to start negotiating away my rights to keep the software without telling me.
So I fired the lawyer and kept the software.
Since neither of us really had a use for the software, he never did file suit against me and I still have a copy of the software.
All I need to use the software, besides a reason to use it, is a PDP-11 and a VAX.
You have to be kidding (Score:5, Interesting)
Right, and then we'll all dance in fairy land and everyone will be happy. I mean seriously, there's no chance in hell that would happen. If the team ever did anything worth a damn with it then the lawyer might have his boss come in and say "Why the hell did you give this away, you are FIRED!"
I mean, that's just not the way this world works. I'm pretty sure parent is a troll (and a good one! ;>), but it does raise a good point, namely the following...
The only chance you would have of open-sourcing this would be for the guy to convince the company to donate it to FSF or some other non-profit. The FSF would then value the code at some ridiculous value, giving the owner a massive tax write-off that is much more valuable than it sitting around collecting dust, and more than the guy could have ever paid for it.
That's the only chance of open-sourcing this stuff.
Depends what you want to do with it... (Score:3, Interesting)
Are you feeling lucky? (Score:3, Interesting)
If you're feeling lucky, you could simply publish the source code. Assuming that there are no trade secret issues, putting it on your website for public comment might not involve any serious liability.
Two things (at least) could happen:
1) The real copyright holder might notice, and answer your questions.
2) Nobody might really care, in which case you could eventually do something more daring.
3) SCO might sue you for infringing their copyrights on Unix^H^H^H^Heverything.
Option (1) could involve a bit of embarrasment for you, but if you weren't distributing the code, or claiming the right to do so, I imagine that you' probably get away with it. Or not. Talk to your lawyer. Get someone in Nigeria to post it.
Option (2) isn't so good, either. Although you never get in trouble, you really can't distribute or license the code. MAybe you could start a project to reimplement the functionality?
Under option (3), at least you would get some serious publicity on Slashdot.
It's 'work for hire' (Score:2, Interesting)
Re:creditors and dead code (Score:2, Interesting)
Not necessarily. As long as he doesn't publish the code somehow, his may well be the only existing copy. It's actually a bargaining point. They either deal with him fairly, or they get zilch. All he must do is "lose" the disks. Remember, his copy is legal under fair use (backup copies made while employed) 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.
Sort of in this situation (Score:3, Interesting)
The author then died, with no heirs, but he had assigned the software (In code comments) to his employer. I called the employer, and asked. I was told, "Do what you want with it - it's yours". Unfortunately, I've never gotten a letter, so I have never really continued. If they want my changes, they can have them. Much better products have come along in the 7 or 8 years
Prevention? (Score:5, Interesting)
Sounds grim but true.
So I have to wonder,
Is it just that no one thinks their corporation will ever die? Are bankruptcy proceedings so sloppy that they leave any property unassigned?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.
IANAL, but, now and then, they're indispensible.
[It's too bad the code author didn't have some claim on the company's assets, such as a paycheck that didn't come. I could see where he could submit a claim as a creditor and negotiate to settle for said source code.]
One Thing You Can Be Absolutely Sure Of......... (Score:2, Interesting)
Did the company owe you any money? (Score:2, Interesting)
I've seen this "donation" racket (Score:5, Interesting)
Not really - it has an intrinsic value that is independent of their actual cost. I've seen a lot of this lately, all involving nonprofits as recipients. MS donates copies of windows to schools, and typically deducts retail price. Another biggie is companies donating patents to universities. Typically the patents are things that didn't work out for them, and got shelved. They donate the stuff to the university in exchange for a "favorable" valuation of the donation, which is typically more than they could have ever sold the patent for.
So, from examples I have actually seen, there is frequently a disconnect between what a donation should be valued at and what's been happening. Supposedly the IRS is going to look more closely at this, but good luck there. This has been a nice loophole for a few years now, as everyone but the government wins. The nonprofit gets something that might be of some value for free, the company gets a big writeoff. The nonprofit doesn't pay taxes, so that's not a consideraton. Nice racket, eh? Some big companies have been doing this too - can't remember exactly, but Big Oil comes to mind, as does Dow Corning.
Re.: Lawyers (Score:2, Interesting)
It seems to me that your best bet might be to put a notice in the appropriate publication(s) announcing your intention to appropriate the code and ask whether anybody has a stronger claim to it than you. Then cross your fingers and hope that nobody takes the bait. That's essentially what the bank would do if it found a deposit box full of stuff and it couldn't determine the owner.
One question one might ask is whether your employers allowed you to take copies of (their) source code off site, and if so, why.
Is this what happened to it? (Score:2, Interesting)
Treat it as a bonus! (Score:3, Interesting)
So if the PHB lets you go home with all the code, maybe you could argue (*cough* make up *cough*) that it was a parting gift for years of service?
If you didn't start selling licenses to the code they probably wouldn't notice or care anyway, same as if you didn't turn around and sell the company server for $100k. Maybe release it as GPL? If no money is being made, the developers will probably agree with you that it was a good thing to do, while the management won't notice for years to come.
NOTE: I am most probably an idiot. Take my advice at less than face value. Do not listen to me for I Am Not A Lawyer. (iANAL being the complement of ANAL)
Not too hard to determine (Score:3, Interesting)
Can I start a company called WebVan today? Maybe. How about using WorldCom's logo for my new venture?
Bigger question: will anyone who can claim rights to those things pursue me if I use them for myself? Probably not -- unless I am successful. If I am successful that will get the attention of people who might have told me "who cares." If there is a legal heir, they will fight for the throne.
I've seen the legal agreements for software ownership at software companies -- there is always a clear deliniation of ownership rights for contingencies such as sale, merger, public offering or dissolution, etc., of the company.
In one recent agreement we had a partner who was responsible for writing and maintaining the bulk of the application system. We had contract language to the effect that if the company could not support the application or if the company folded we would obtain rights to the software. That's just an example.
Point is, there most likely is a legal owner and if you do something unauthorized, you'll be vulnerable to legal repercussions.
BTW: Don't mix that source code in any forum that could be seen by GNU or Open Source developers, or you'll taint the community.
Re:Lawyers (Score:4, Interesting)
Do you know who was the corporate counsel for the company? If so, have your lawyer contact them.
This is not correct. First, the liquidator is the one that would have done anything that need to be done. That's your first port of call.
If the liquidator didn't sell it, then what happened to the property depends on what country (and state, in some cases) the company was incorporated in. Typically the undistributed property of a delisted company vests in the securities regulator or government for the company's incorporation jurisdiction.
Even if the liquidator didn't sell the IP, they should be able to tell you who gets it by default. There shouldn't be a need for a lawyer, and let's face it, who wants to give money to a land shark if it's something you can do yourself.
Thus there is almost certainly an owner somewhere - you need to contact them and see if you can buy the rights, which you will probably be able to do if they're held by a regulator who has no other use for them (especially if you have the only copy of the code that could be used to make use of them).
Donating probably won't be viable (Score:2, Interesting)
When there is no clear market price for what you are donating, then original cost, or if ascertainable, replacement cost, would be strong guide in determining the value of the goods provided. Depreciated original cost (whatever the book value would have been) might also be a good starting estimate.
Donating is sometimes a great idea. The problem is that since the company went out of business, it's almost certain they lost money, thus they have no taxes to offset. If was a C corp, then unless that business revives itself without a change of control within the statutory period for reclaiming tax losses, the "losses" will never offset any taxes inside the corp.
It would be very interesting to hear someone who knows says who "owns" the code if the corporation was formally wound-up without some of the intangible assets having been sold. Theoretically the liquidators should have gotten some value for it. It may have even been sold to the law firm or other insider for $0.01.
I would suggest taking the "I'm poor but would like to work on this / see the code live" approach. That will lead well into either the "why doesn't the current holder give it away to something like the FSF and take the deduction" or the "what's the lowest price I can pay for it" discussion or the licensing/royalty discussion, which also sounds like a good idea.
How about GNU-lize it? (Score:1, Interesting)
Re:creditors and dead code (Score:4, Interesting)
Now the code is effectively open sourced, and you have an audit trail to prove it, but only you can access it. Since its BSD you can freely create derivative works and sell them without restriction.
The worst that can happen is that if by any chance the actual owners of the code (as per the many other responses to this post, these will likely be some creditors if the company actually did go bankrupt) were to find out what you are doing, your defence will be that the code was open sourced and you thought you had every right to use it. The notary will back you up here.
Of course you would immediately lose the code - but you will be safe from any legal nastiness. So make sure you've taken plenty of money out of the business by then. And better still, create a trademark or brandname that will have some value to the real owners, then you can sell it to them.
Belly up != nonexistent (Score:2, Interesting)
Whoever owns the pile of papers that represents the entity that is your former company could easily have a problem with what you are doing.
Check EDGAR and other SEC sources (if a public company) for current contacts. I would assume a lawyer would be required to tell you when you have tried "hard enough" to contact any interested parties.
Copyrighted Material is STILL not property (Score:3, Interesting)
I am not a lawyer, am I completly off base here?
legally, the answer seems simple (Score:3, Interesting)
There is a bill floating around Congress that would require copyright holders to pay a tiny ($1) fee every few years to maintain copyright protection for their works precisely to get creative works out of this sort of limbo. But even then, you might still be contractually bound not to disclose the software.
If this matters to you, you could try to make it part of your employment contract next time that under a well-defined set of circumstances (bankruptcy, five years elapsed without a product), your copyright reverts to you or the software may get published. In fact, customers might like such clauses as well (source escrow). But most companies won't go for it.