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Customer Hacked our Propriety Software

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CQuinn

New Contributor
Apr 24, 2019
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Hello All, I have a long time old customer who spent a lot of money with our company developing out our product ProSTART, which we sold to them many years ago. Our signed agreement with them says our company owns any and all Intellectual rights to our product and any customization to this software. One of our employees, quit us and went to work for them and changed all the [Full Access] passwords to this software. Our ex-employee changed the passwords to the software, which they host on premise at their location and told me at the time he didn't have any idea how the password was changed. Unbeknownst to me he was secretly going to work for them and stole our account and intellectual property.

He still works for this company as I called him to confirm this. I'm looking for advice on how to handle this situation. I believe the right approach would be to have our attorney sent them a cease and desist letter and then require them to pay for access to the source code, which could easily be into six figures. Please let me know if you have ever any had any situation like this and/or if you have any thoughts or advice, it would be much appreciated. Thank You!

Chris Quinn
 
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SpaceKing44

New Contributor
Jan 22, 2018
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New Jersey
Hello All, I have a long time old customer who spent a lot of money with our company developing out our product ProSTART, which we sold to them many years ago. Our signed agreement with them says our company owns any and all Intellectual rights to our product and any customization to this software. One of our employees, quit us and went to work for them and changed all the [Full Access] passwords to this software. Our ex-employee changed the passwords to the software, which they host on premise at their location and told me at the time he didn't have any idea how the password was changed. Unbeknownst to me he was secretly going to work for them and stole our account and intellectual property.

He still works for this company as I called him to confirm this. I'm looking for advice on how to handle this situation. I believe the right approach would be to have our attorney sent them a cease and desist letter and then require them to pay for access to the source code, which could easily be into six figures. Please let me know if you have ever any had any situation like this and/or if you have any thoughts or advice, it would be much appreciated. Thank You!

Chris Quinn
Ouch! That is certainly a sticky situation to be in. I know that corporate theft like that happens to small and large organizations alike. I hope things work out for you. And certainly -- using an attorney is a reasonable path to take. Maybe looking for an attorney that specializes in IP theft would be another way to go about it. In any case -- I wish you well.
 

CQuinn

New Contributor
Apr 24, 2019
13
3
14
Ouch! That is certainly a sticky situation to be in. I know that corporate theft like that happens to small and large organizations alike. I hope things work out for you. And certainly -- using an attorney is a reasonable path to take. Maybe looking for an attorney that specializes in IP theft would be another way to go about it. In any case -- I wish you well.
Thank you so much for responding and your generous advice. I will certainly look into that.
 

CQuinn

New Contributor
Apr 24, 2019
13
3
14
Get a good lawyer. Let them figure out how much you're owed.
Thank You! Yes, which brings up the question how does one value intellectual property? I figured 25% of the total the customer spend on the project? And they have been illegally developing in our application for 5 years.
 

Kruiser

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Two pieces of advice.

1. I wouldn't continue to post this info on a public forum. Everything is pretty much fair game in discovery. Do you want to be sitting in a deposition a year from now having opposing counsel ask you questions about your posts on this forum? (Hint: no).

2. Force your attorney to think this situation through from end to end and give you a range of likely outcomes, budgets, etc. You'd be surprised at how many attorneys don't think litigation through from end to end. They just want to get the billing machine up and running. Don't spend $200k to get a judgment for $100k against a defendant who can pay $50k at most. Litigators will resists budgets. "We don't know what will turn up in discovery, we don't know what the other side will do, etc." All that is true. But have them give you budgets anyway. Budget for filing, budget for an injunction (if you are seeking one), budget through discovery, budget for various motions, etc.
 

CQuinn

New Contributor
Apr 24, 2019
13
3
14
Two pieces of advice.

1. I wouldn't continue to post this info on a public forum. Everything is pretty much fair game in discovery. Do you want to be sitting in a deposition a year from now having opposing counsel ask you questions about your posts on this forum? (Hint: no).

2. Force your attorney to think this situation through from end to end and give you a range of likely outcomes, budgets, etc. You'd be surprised at how many attorneys don't think litigation through from end to end. They just want to get the billing machine up and running. Don't spend $200k to get a judgment for $100k against a defendant who can pay $50k at most. Litigators will resists budgets. "We don't know what will turn up in discovery, we don't know what the other side will do, etc." All that is true. But have them give you budgets anyway. Budget for filing, budget for an injunction (if you are seeking one), budget through discovery, budget for various motions, etc.

Thank You for your advice, I believe a particular contributor on this thread is indeed not friendly to our situation if you know what I mean. I deleted my post for what it is worth. Thank you so much for your advise, it is much appreciated.
 
Last edited:

broswoodwork

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Thank You for your advice, I believe a particular contributor on this thread is indeed not friendly to our situation if you know what I mean. I deleted my post for what it is worth. Thank you so much for your advise, it is much appreciated.
Was sort of eyebrow raising that a parked brand new account pops up and immediately starts asking for updates on an ip litigation thread without doing anything else on the forum, even presumably viewing other threads. Strange...

Best of luck to you sorting all of this out dude!
 

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