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Say someone wrote some software PRIOR to employment at the company where they currently work. They presented it to a CEO and three other high level employees of the company. They expressed, what the creator considered, an extreme amount of interest in the software. They asked if the creator be willing to sell it, said that it was exactly what they were looking for, and asked the creator when and how they came up with the idea.

They also made sure to say that they would be in contact with the creator soon. However, the creator has yet to hear anything after a week. the creator has followed up, with no response thus far (24+ hrs).

My question is: What are the creator's legal rights to the software? and how would the CEO's counsel advise them to move forward with this? Should the creator be concerned about the potential for theft of the intellectual property?

This would all be, hypothetically, in Pennsylvania

  • What agreements did the employee sign? Many companies these days require you to sign an intellectual property agreement. These often include a provision that existing IP of the new employee that's related to the job and/or business of the company needs to be documented up front. While cumbersome, these provisions exist to avoid the exact scenario you are describing – Hilmar Dec 22 '18 at 20:27
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The creator would hold a copyright on the source code of the software, assuming that it was created outside of any employment and so was not a work-made-for-hire, and also assuming that the creator had not previously transferred the copyright.

To be honest, a week is a very short time for a large or even medium-size corporation to make a decision on whether to purchase new innovative software. That the seller is also an employee might add additional complications, further slowing the decision. I suspect that the creator is being unreasonably suspicious unless there are other indications that the company intends to steal his rights, beyond simple silence from the company.

The creator would be wise to register the copyright, and to take other steps to preserve a dated record of the software, so that its existence and content at a specific date can be established later. This might be done in any of various ways.

If the company should infringe the creator's copyright, the creator could sue and (if the creator won) get damages plus an injunction preventing the company from making further use of the software.

The corporate counsel is likely to advise that the risks of trying to steal the software are rather higher than the price to make a legit purchase (unless the creator is quite unreasonable in his or her demands). The counsel might advise making the purchase, or forgoing the use of the software.

Copyright is entirely a federal matter, and so the specific state will not matter on copyright issues.

The creator could have asked (before the demo) the CEO and other company representatives to sign an agreement that the software was the creator's property, and that they would not use it unless they purchased the copyright or a license. This could be combined with an NDA. That would be legal, but might have been offputting and made a deal less likely.

If the company is a reasonably reputable one, I don't think the creator has too much reason for worry.

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