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I am in a situation that I think is not uncommon nowadays.

I wrote software on my own time, by my own decision, and with my own resources during my undergrad career at a university in the US, and now I want to be monetarily compensated for it because my software is used on a regular basis by a department in the university. I have heard of a couple cases where a student wrote a program that he/she thought would be helpful to the university in some way, after which they purchased it because they also thought it was valuable.

I want to go through the same thing, but the head of the department seems to refuse to pay (or at least say they are unable to pay for it). They claim it was a "senior project" even though that is not true, but somehow that means they can't pay for it. I think the intellectual property and my work that went into the software is worth money, so I feel I should be compensated.

Since that department is already using it and finds it valuable, shouldn't they pay for the product? If they completely refuse, is it smart to take the software away?

EDIT for clarification: Nothing has been signed. There have been no agreements written on paper that determine who has ownership. We have only spoken about this.

As a "trial period" I gave them the software's source so they could use it while I was away (because I graduated and moved away) and so I could make updates to the code. This was not a senior project. My work on this project had nothing to do with the university while I was writing it. The only relevance was that I intended to have it be used by the people at the university once it was finished.

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    "because my software is used on a regular basis by a department in the university" - under what terms are they using it now? Was there any agreement (implicit or otherwise) that they could use it, and was that agreement limited in any respect? – O. R. Mapper Jul 6 '15 at 18:53
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    If you say "trial period", are there emails that document that you gave it to them as a trial period (that specifically use the word trial)? – Christian Jul 6 '15 at 19:58
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    If the department had nothing to do with it, why do they have it? We're missing that part of the story. Were you working under the guidance of a faculty member? – Scott Seidman Jul 6 '15 at 20:11
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    To reiterate that point: Is the "senior project" something supervised by the university? If so, did you sign any kind of contract for the project? At universities at my place, any such project or thesis invariably involves a signed agreement by the student that grants a perpetual, non-exclusive right to the university concerning any code or otherwise usable product produced during the project or thesis, for example. – O. R. Mapper Jul 6 '15 at 20:15
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    You probably should give up the idea of getting money from your university about that. – Basile Starynkevitch Jul 7 '15 at 7:03

10 Answers 10

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I would suggest a different tactic altogether: Give them a license to use the software as well as any and all updates for free. Support should not be free but done by others under your instruction. In return ask them to sign over any previously perceived ownership of intellectual property. Next ask that they help you by providing suggestions for improvements to your software. Sell it to every other university in the world.

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    If it's really that much better than the competition, this is the right business plan. Treat them as your beta testers and reference account, and encourage them to tell everyone else how much they like it. Make the current situation work for you. – keshlam Jul 6 '15 at 22:41
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    Let the wookie win. – dotancohen Jul 7 '15 at 18:45
  • This is possibly the worst advice here. due to the really really bad sentence " In return ask them to sign over any previously perceived ownership of intellectual property" In a dispute where they're claiming ownership where the OP may not wish them to claim ownership you're advising the first thing he should do is to agree with them in writing by asking them to sign over ownership.Worst plan imaginable. – Murphy Jul 8 '15 at 12:14
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    @Murphy: You'd need a lawyer to word it properly, but it is entirely possible to have a contract where one party relinquishes a claim without the other party acknowledging that the claim was ever valid in the first place. – Ben Voigt Jul 8 '15 at 16:15
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I wrote software on my own time, by my own decision, and with my own resources during my undergrad career at a university in the US

I want to go through the same thing, but the head of the department seems to refuse to pay (or at least say they are unable to pay for it) because the software was just a "senior project."

You have a disagreement about the copyright on this software. You say you wrote it completely independently, while they seem to assume that the project was part of some kind of undergrad project.

One interesting question is how the department initially started to use the software if it was just your own, completely independent, project. Under what circumstances did you give them access to the software? Under what agreement? How did they even know that this software exists? If you just went to them and told them "hey, I wrote this nifty tool for the problem you talked about in this course, care to start using it?", I think an argument could be made that they could reasonably assume the software to be made available free of charge. Usually, if one wants to sell something, one does not just give away the product and then, later on, starts talking about money.

In your edit, you say:

As a "trial period" I gave them the software's source so they could use it while I was away

Was it a "trial period" or a trial period? That is, did you just intend this as a trial period, or was it at least verbally made clear that you expect to be paid for this project down the road? Your post somehow alludes to me that you did not.

Since that department is already using it and finds it valuable, shouldn't they pay for the product?

Not necessarily. Open source and free software exists, so just that they are using something does not imply that you are entitled to getting paid. Further, if you in fact did work on this somehow connected to an university project, the legal situation gets muddy much more quickly than what you seem to assume.

Further, I should caution you that most customers, including universities, typically expect more than just a piece of running code when they actually pay for software. If exchange of money is involved, part of the agreement may be that you are supposed to be available for bug fixes, feature requests, and user trainings down the road (paid or unpaid, depending on agreement).

If they completely refuse, is it smart to take the software away?

Legally, you are likely free to do so. Technically, it may be hard to "remove" already deployed (in some grey-area legal situation) software. Even if somehow forbid them to use your software in the future, this sounds only like a good idea if you never need to deal with them again. You are likely going to be a very unpopular person in this department.

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    @Saichan Legally, you are certainly free to still ask for money. Their willingness to pay will depend on many factors, though, including (1) how much they really need the software, (2) how much you ask for, (3) whether they honestly think it was part of a senior project, (4) and whether they think you somehow tried to get them started using your software and are now ransoming them by the threat of taking it away. So, in summary - some social skills will be required, as in most business interactions. – xLeitix Jul 6 '15 at 19:32
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    I'd up vote except for the last paragraph. Legally, I don't think he has a leg to stand on... and attempting to remove the code over their objections might even open him to vandalism charges. – keshlam Jul 6 '15 at 21:42
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    @keshlam I am not convinced that the OP has legally no right to disallow further usage of software that he wrote, even if there was an understanding that the software was provided free-of-charge. At least within my jurisdiction, that is indeed something that sometimes happens. Of course "take it away" would mean sending a letter (e.g., via lawyer) asking them to uninstall, not hacking into their machines and deleting it himself - that he is most obviously not allowed to do. – xLeitix Jul 7 '15 at 6:18
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    A nitpick about the beginning of your answer: I think it's misleading to imply that this is a copyright issue. Based on my understanding of the question, the ownership of copyright in the software is not disputed. That rests with @Saichan. What is disputed is whether the university has a current license to use the software without paying Saichan for it, and if so, what the terms that license are. – David Z Jul 7 '15 at 9:02
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    @DavidZ if they think it's a senior project, aren't they owned by the university? – Robert Grant Jul 8 '15 at 11:43
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In addition to the other answers, I would like to specifically respond to one part of your question:

Since that department is already using it and finds it valuable, shouldn't they pay for the product?

Not only with respect to this university, but also concerning possible future customers of yours, I consider this stance to be a very unwise one to express. The issue is that it can easily be understood as

I let them use it for free because I didn't think it was valuable, but now that I see that they actually need it, I am going to start charging them for it.

That, in turn, means that you did not spend a certain amount of resources that you wanted to ammortize with the revenue from your software all along. Rather than that, it can be interpreted as waiting till your software (that the department seems to have assumed to be free) is in use (and possibly not easily replaceable), and once that has happened, you let the trap snap shut to make a few quick dollars.

I would consider this deeply unethical, and if anyone outside of the department learns of that, it certainly does no good for trusting in future software of yours. If I buy a future piece of software from you, how can I be convinced that it will not suddenly be severely restricted once you realize it is much more valuable than what you charged me?

It is bad enough that numerous companies in the real world already use this business model. Please don't become one of them.

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    @SalvadorDali: If the price can suddenly go up, that drastically reduces the value of the product, and thereby the demand, because customers cannot rely on the fact that the price will remain at least to some extent stable. For some products, this is even so essential at least in some places, laws regulate how far prices are allowed to suddenly rise (you wouldn't want people to become homeless just because the landlord realizes they can charge more). Lastly, business works by charging the price of manufacture plus some revenue. Sudden jumps in price make it blindingly obvious to customers ... – O. R. Mapper Jul 6 '15 at 20:41
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    ... that what is charged is not manufacturing costs plus "some reasonably deserved margin of revenue", but rather an arbitrarily high amount that the vendor apparently thinks they can make customers believe is justified. At that point, we come back to the loss of trust I was referring to in my answer. – O. R. Mapper Jul 6 '15 at 20:42
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    @SalvadorDali "If you rent a place and a landlord figures out that his price is too low for the market, he is rising the price." And then, in Austria and Switzerland, you call your lawyer and the problem will go away very quickly. – xLeitix Jul 7 '15 at 6:23
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    @SalvadorDali No, a landlord may not raise the price as much as they want in all of the US. First, the landlord can never raise the price on the stuff you already agreed about; if you signed a year-long lease at some price, the landlord can't say "it's valuable so pay me more." Second, there are cities with rent control laws that prevent landlords from raising the price excessively. – cpast Jul 7 '15 at 19:23
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    @SalvadorDali It's not about raising the price once something becomes valuable. It's about raising the price once someone has "entangled" themselves with your product. For instance, if gmail suddenly become a paid-only service, people that had expected a free product to remain free would be put into a nasty situation. – slicedtoad Jul 9 '15 at 14:48
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Senior Projects can be rough from an IP standpoint. I'm not speaking as a lawyer, but I am speaking as someone who manages many senior projects and is in the middle of working out the IP status of the students with our univ counsel.

For your specific case, we're missing some of the specific details, like exactly what were the resources put into the project, etc, and exactly what were the circumstances and communications involved (please don't provide that as comment -- I'm not particularly interested, but will try to cover a variety of scenarios and you can place yourself in whatever box you see as appropriate).

My recommendation is if you worked on this FOR a specific lab or department, and they helped you evaluate and debug, and no discussions of ownership took place a priori, and the ONLY possible users are the people you've been working with, then I would allow them to keep using your code without charge REGARDLESS of whatever legitimate IP claims you actually have, and chalk it up to experience and lessons learned. If the groups needs any further development or support, let them know that you're willing to handle it on a consultant basis. Note this has nothing to do with what's legal or what your real claims are. It has to do with professionalism, making payments and deliverables clear before work is started, leaving behind a swath of people who feel good about working with you as opposed to people who regret having worked with you.

If you really plan to develop your code, improve it, and market and sell it beyond the boundaries of that one department, then there may be clear disadvantages to just handing them your IP, and you should start a business and consult with a lawyer. Personally, I would think in that case your best bet, or at least a good option, is to formally grant the users non-exclusive use of the code at no cost, just to make it clear that you are holding on to your IP and not giving it away.

In all cases, you should make sure that if money is going to be made in the future with this code that you will be part of it or all of it! Thus, even if you decide to just let the department continue to use it, and have no plans to ever sell it elsewhere, you might want to go through the exercise of establishing a license, just to establish ownership in case the department ever wants to sell it on their own.

Of course, getting the right sort of licensing contract might just mean hiring a lawyer, and thus spending money. You'd have to figure out if that's worth it, unless there are some kind of templates out there.

In our own design course, we certainly don't want anyone taking advantage of our students from an IP perspective. That said, we have "customers" for every prototype we generate, and if we cut off our customers from the fruits of the project, we wouldn't have many future customers. We have had IP come out of the class, and some of the patents have been assigned to the university with students as inventors if the university has contributed substantial resources to the project, or if a faculty member is one of the inventors. Others, where the university has not contributed much in the way of resources, go to the students, who are free to do with it as they chose. Some have spun out businesses. In either case, we would NEVER cut the customer out from at least being able to USE the prototype. It would be shoddy.

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    "Senior Projects can be rough from an IP standpoint." While correct, I should say that the OP specifically said that this was not a senior project - this is only the argument of the department. – xLeitix Jul 7 '15 at 6:20
  • Considering that it's a premise of the question that the software was not actually a senior project, I don't think this is a useful answer. (Though I see that, at the time you posted the answer, this wasn't clearly stated in the question.) – David Z Jul 7 '15 at 9:07
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Unfortunately you have painted yourself in the corner. You are facing two very prominent problems here:

  1. Its one thing to get people to use/like a piece of software. Its a totally different ballgame if they need to pay for it. Going commercial changes everything, permanently, no going back. It also changes peoples perception of the usefulness of your software.
  2. Your actions may be perceived as variation of a bait and switch fraud. As such people in charge can react to this very unfavorably. Many times this would lead them to sever contact with you, possibly even in spite, regardless of cost.

Its not so easy to get people to give out money. Especially by changing the deal retroactively.

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    This answer, short as it is, deserves many more upvotes. – xLeitix Jul 8 '15 at 11:47
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If you have previously given the software to them for free, with no license agreement in place, I don't think you can charge them for continuing to use those copies. You could charge for support, but they can always decide to support it themselves...

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    This is almost certainly wrong. If there was no license in place, and no explicit right to for the University to use student work in the University's rules, then he can ask them to stop using it. If they don't, then they are likely violating his copyright and can be subject to lawsuit for damages. He probably can't sue them before asking them to stop since there was an implied license to use it when he gave it to them. But this answer is probably not correct. We'd have to know much more to say anything close to this. – Bill Barth Jul 6 '15 at 19:00
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    Without a license, there is only copyright, and if he gave them authorized copies at some point I don't think there's a way to take them back. He can forbid their distributing the software further. He can refuse to support/enhance unless they buy new copies (which may carry a license). But unless the school took the code without his permission.... Of course, simply threatening to publicly complain that the school swiped a student's work might embarass them into either paying a small fee or no longer using that tool... but blackmailing your own school may not be a career-enhancing move. – keshlam Jul 6 '15 at 19:11
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    @BillBarth: Saichan is claiming this is not "student work product" (which becomes very dicey so far as intellectual property rights and which the University may be able to claim ownership of as such) but rather work done by someone who also happened to be a student. Simply put, if he gave verbal permission for use and presented them with copies for use, he has given those copies away to them (see keshlam's comment). You can't retroactively claim license terms on something someone already owns. At best you could offer to sell them a new version, or a service contract, or more copies. – taswyn Jul 6 '15 at 22:07
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[Putting on my department chair hat]

We're often cautioned by the administration to avoid conflicts of interest. This makes it difficult for us to sign a contract with someone who is not at arms-length relationship from us. A former (or current) student is problematic from this perspective.

  1. If you were selling a commercial product and we happened to be just one of many clients, we could argue to our auditors that there's no special interest involved -- your product is simply the best on the marketplace. This is not the case in your situation.

  2. It would also be different if we hired you as a work-for-hire student (or non-student) worker. Then we would own the product of your work. To the auditor, we simply hired the best student/worker that was available, paying the fair-market wage for that type of work.

But you are presenting a third scenario where you want the department to license your software for an undisclosed amount. How do we justify to the auditor that this is a fair price and that it isn't simply a payoff to you?

The people who suggest that you give the software to the university for free and instead contract your labor as support are using a variation of #2. You would have difficulty asking for more than the normal student wage, however.

This doesn't solve the question of who owns the intellectual property rights to the software. If you weren't a student worker, then the university usually has little claim but you need to check your university's IP regulations. That being said, you don't want to burn bridges. The most amenable suggestion would be to tell the Chair that the software they are using is copyrighted by you and that you will allow them to use it for free, but they cannot redistribute it in any form.

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A number of issues yet to clarify.

  1. Were you at any time, an "Employee".
  2. What basis really exists for classifying the work as a Senior Project ?

This should be black and white. Can they sanction you academically if you sue ?

  1. Were you "supervised" in any way during the development, was it truly independent ?
  2. What rights did you sign away upon enrolment ?
  3. Is the source in their hands ? What copyright exists ? Can they alter the code to create a derivative work that differs substantially ?

Your only other course of action would be to issue them with a non-exclusive license, and incorporate, transferring the rights to the corporation.

2

First, I would check the IP guidelines/regulations of the university. Many institutes, university etc explicitly deal with such situations about patents, software etc. If you find any relevant part pro or contra, you have at least something to talk about with your department and with IP office of university.

Second, even if you own the copyright and all the rights, you may not get money out of them. Not because you don't deserve, but because you are in a tricky position now and most probably you don't have the power to go full legal bottle (would it pay off). What you can do however to clear up the legal status, and make them sign a contract that they can use the software for free (maybe restricted to this version, so they actually have to buy any latter upgrade), but they acknowledge your rights, they do not give it anyone outside of the institute or given labs and they grant you to sell the software to other universities.

If the software worth anything, you can make much more money selling it to other labs, and the people who use it know will be your free advertisements. You can explicitly ask them to reference you whenever they use your software. If you offer this option to them, they don't loose face, they don't need to pay any money, so it is a very smooth solution for them, too, on long term it and has merits to you, too, and you don't need to hire a full legal team.

  • What's their incentive for signing a contract like this? – Mehrdad Jul 8 '15 at 10:49
  • @Mehrdad If OP is correct, and actually have the rights for the software, then it cleans up the situation and legalize it without any cost. If OP is wrong about the situation, and he has no rights, off course there is no incentives to the univ to sign anything. These kind of contracts are rather common when someone develops a software related to his research with the consent of his supervisor or someone wants to take out his existing code and continue development as a commercial code (see e.g Gaussian). – Greg Jul 8 '15 at 11:00
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I feel you wrote the software for the university and out of your own curiosity, but you didn't sign anything and now you regret the time you spent on it.

Actually, it happened to me and finally I abandoned it. But you said:

Since that department is already using it and finds it valuable, shouldn't they pay for the product?

You can't force them to pay for something if they didn't agree it before, but in such situations, if you think they really need your software then you can do the deal.

You are the owner of the software and if it really worth, customers pay for it, jut advertise it and negotiate on it as the university is one of the customers. If they get convinced they will buy it, if not you don't give it to them (However, you still regret the time you spent on it, but it was your own risk. When we don't specify our purpose of something and we don't sign an agreement, we should expect such things to happen.)

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