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Am I allowed to encrypt customers data residing on their servers, preventing them from exporting the data to a competition without my help. I need it to make sure the customer doesn't change services before paying off the bill.

I'm providing them with the software to access data, the user is creating the data using my software, which saves it on the customers servers.

Question is if I'm allowed to save the data in a way only my software should be able to read it, with no option to export. the data is saved in a sql server database which gives the option to encrypt the data with a secret key, customer has no way of exporting that data without the key.

I guess the customer owns the data, and I'm not looking to take it away from them, Just need to block them from changing providers without contacting me first... once the customer is already hooked up with another similar software its very difficult for me to get the money out, even with the contract. On the other hand, if they need my help changing provider, I could get the money easily.

Customers don't sign long contracts when purchasing the software.. so there's no real agreement between us about the data etc.

  • How is your relationship with them structured? Is it based on a contract? Under what means did they grant you access to their servers? Who owns the data? Why are you not looking at filing a lien to ensure payment? – Jason Aller Jul 11 '16 at 18:01
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    Editing the question to include the details you've added in the comments would be helpful. The other useful bit of information would be to determine if you have a license under which they are using the software and if that license includes a clause about which jurisdictions laws will govern the license. Without that information this would feel more like an ethics question than a legal question. – Jason Aller Jul 11 '16 at 18:20
  • This is a very, very dangerous game to play. I would not do this without talking to a lawyer first. If you cause a customer damage through this action, they could sue you for damages which could be very expensive. – gnasher729 Jul 12 '16 at 22:01
  • Thanks for that comment, I figured it could possibly be a legal problem that's why I asked before. – Ezi Jul 12 '16 at 22:49
  • @JasonAller Edit done... – Ezi Jul 14 '16 at 1:24
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Unfortunately I believe that this is legal in most places, provided your agreements don't say anything to the contrary, and provided that the users can still view the information.

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  • "Illegal"? I have not looked up the case law but my guess is the law frowns upon this type of thing proposed here. – user3344003 Jul 14 '16 at 2:42
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    Nope, I believe its legal - You must live in a very enlightened country - one far away from American Corporates clutches ! Google the term"Proprietary Format" and you will see it is sadly common. – davidgo Jul 14 '16 at 2:46
  • I would cite Restat 2d of Torts, § 766B to the contrary. – user3344003 Jul 14 '16 at 3:03
  • @user3344003 - If my Google-Foo suffices, 766B is "Tortious interference with prospective contractual relations" - The OP has specifically said he is not trying to prevent the data from being moved - just that he wants to get paid first - that does not sound like Tortious Interference to me. – davidgo Jul 14 '16 at 7:42
  • He's interfering with someone trying to establish a contractual relationship with someone else. – user3344003 Jul 14 '16 at 13:20

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