IP ownership when money owed/unpaid?

[d000hg]

On a project for which I have billed in total £150k over two years, there is a payment for about 15% of this outstanding which is 9 months late.

Is there a strong precedent set about ownership/rights over the work/IP produced in such cases? For instance is it justifiable to say the client does not own the IP until they pay up, and even to tell them they may not use the IP until they do - it's IP they re-use to generate their revenue?

Or do they still own the IP regardless - payment and ownership being two different things?

Before someone says it - there is nothing in a contract to explicitly cover this.

Also, the client is outside the UK/EU. Apart from actually chasing them legally for the money, what would you do in this situation regarding the IP produced?

[craig1]

If you've nothing in writing then the default copyright rules will probably apply. In short, if it's branded as theirs then it's theirs, if it's branded as yours then it's yours. If it's neutrally branded then it's most likely yours unless it has been written in such a way that it can only be used for them. Intentions also matter; if you've clearly passed ownership over to them by your actions then all the above is irrelevant. It's a damnably complex subject that I'd suggest you speak to a specialist lawyer about.

Also, your last point in jurisdiction is relevant because I assume you have a contract somewhere, if so, it should state the contract's jurisdiction. If England and Wales then you've a far simpler job of registering a claim for copyright.

[Wanderer]

Or do they still own the IP regardless - payment and ownership being two different things?
Before someone says it - there is nothing in a contract to explicitly cover this.

A good contract should cover this term, but since it hasn't you will have to figure out if it's Work For Hire or not. If it's work for hire then they own the rights to it. If your LTD did the work, retains ownership of it and only offers the client a license to use the work then you could withdraw their licence to use the IP for non payment.

Does it really matter though? If they aren't going to pay then will it make a difference if you took action against them for non-payment vs for breach of license?

Or is it that you want a justification to retain ownership of and re-use IP that was done as work for hire in order to recover the money owed?

[d000hg]

I want to know if I could tell them "since you haven't paid, you don't yet own the IP" - which is a big bargaining chip to expedite payment, especially if I also threatened to tell their client they aren't allowed to use the software.

It is work for hire and under normal circumstances they own the IP. It sounds like not paying doesn't change anything, which seems a bit odd - if I buy something on credit and don't pay I expect it to get repossessed.

[SueEllen]

if I buy something on credit and don't pay I expect it to get repossessed.

Consumer law is different to contract law.

In addition retailers have subsidiaries that are a finance company or use a finance company i.e. a bank, to give you the loan so you have credit for the goods. So you have 2 different agreements. One with the retailer for the goods and another with the loan company to repay the loan.

This area of law is complex - The PC World laptop with the £250,000 price tag | Money | The Guardian

[d000hg]

The client is a startup with no legal team. It sounds my claim to the IP is not legally strong, but perhaps worth stating as a means to get what I want since my client's client is a £multi-billion company and my £40k could cost my client £millions of future work if I wanted to cause a scene (which I don't).

[centurian]

This area of law is complex - The PC World laptop with the £250,000 price tag | Money | The Guardian

An interesting case - and I am torn on both sides of that argument.

Clearly this chap was living beyond his means - and I do get the sense that the consequential loss damages are a bit tenuous.

But then I remember HFC/Beneficial were always on the sharp side of things. I remember signing an "interest free HP agreement" with them some years back. It was sold a "1 year's interest free". Of course the (very) small print said that interest would continue to accumulate (around 30%pa if I recall correctly), but it would be waived if you paid in full before the 1-year anniversary. If you went just a day over, all the accumulated interest charges would be applied.

Fortunately I spotted this in the small print, so settled after about 8 months, but I bet many were caught out by this. There was no monthly payment plan during the first year, so it would have been incredibly easy to miss the 1-year deadline. I wonder if they sent out any reminder letters before the deadline

So if the bank was using every legal trick in the book to extract money from it's customers (although I personally considered it illegal - misrepresentation), then I don't feel much sympathy for them if customers try to use the law to do the same.

[VectraMan]

The client is a startup with no legal team. It sounds my claim to the IP is not legally strong, but perhaps worth stating as a means to get what I want since my client's client is a £multi-billion company and my £40k could cost my client £millions of future work if I wanted to cause a scene (which I don't).

Presumably you've signed away the IP as part of your contract (otherwise by default it would be yours). Either way you'd have to sue them, and presumably you could get an injunction to stop them selling their product. But obviously you need much more qualified advice than you're likely to get here.

The PCWorld case is shocking. If you buy something on credit, but return it straight away, you'd reasonably expect the credit to be cancelled. The court were basically saying it was a loan, but presumably he never received the cash value of the loan in lieu of the laptop either. Clearly the guy was being an idiot in what he was claiming for though.

[d000hg]

The aim is certainly to avoid actually getting a solicitor involved. Can it do any harm if I assert that the IP is mine until paid for? Am I setting myself up to be sued if I threaten to contact his client and repeat that assertion?

[Wanderer]

The aim is certainly to avoid actually getting a solicitor involved. Can it do any harm if I assert that the IP is mine until paid for? Am I setting myself up to be sued if I threaten to contact his client and repeat that assertion?

You can't get sued for pursuing a debt provided you are acting reasonably. It sounds like the amount is quite substantial and if it's still outstanding after 9 months they aren't going to pay unless you rattle their cage a bit. Try one more time, get in touch with the people directly and ask them if there is some problem or a reason why they have not paid. Point out that you still own the IP until the bill is paid (doesn't matter if it's true or not). If that fails, then get a solicitor to write to them demanding payment (you can get one to do a letter for about £5 with no further obligation to use that solicitor).

If that fails you might want to see if a debt collector will take it on.