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At what point does it become illegal?

By cpimichael ·
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I am struggling with this and have rejoined TechRepublic just to ask this question.

I am the Technology Lead and a Director in my company.

We hired a software development company to build us an application specific to our industry with the intention of reselling it. Part of it would take over the tasks currently provided by a local software developers application that we purchased. I am not sure if this is ethical, but another Director here asked our developer to look at the local developers application and basically duplicate it. As far as I know no source code has been shared. Is this legal? Is it ethical? I feel like it is not ethical, but believe I am in the minority on this here and need to get my head straight on this.

Thank you for responding, I am really lost right now.

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And you better check the laws where you plan on selling it.

by CharlieSpencer In reply to At what point does it bec ...

If you plan on selling it in other countries, you better check there too. I'd go with all the other recommendations to hire a lawyer.

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Ethical and necessary

by aaronchall In reply to At what point does it bec ...

This is functionality that was described by your company and outsourced. If your company can easily duplicate it in house, so can your competitors, which may tell them what price point they should ask for the software. They have not agreed not to duplicate the efforts of the other company. It is not unethical, it is business, and in your competitive industry, very important strategically.

It tells you which price point you should use, and you have two potential solutions, the better of which you can make a premium solution, and the less functional of which you can make a value solution.

Aaron Hall, MBA
http://www.linkedin.com/in/aaronchall

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It is ...

by Jasonjb1222 In reply to Ethical and necessary

It would be unethical/illegal to have the guy create the whole thing under contract and than refuse to pay him. Regardless, once you OWN the softwarem if no clause was added that the IP belongs to you, you enter the grey area. You would technically be entitled to duplicating the functionality and use of said software, as others have mentionned without copying the existing code.
If royalties are to be given to the original programmer for his work, than you can be in hot water. That being said, he holds the code, and expects payment for his product. Your in house developper develops code for your company, different code, and that is what you are selling/marketting. The NEW IP belongs to you.

Patents do come to mind, but noone owns the patent to "combustion" or it's uses in a car for example. Everyone is/was entitled to developping their own functionning engine and patenting that, once completed.

Grey area indeed. I think, you are in more of a moral struggle than anything else. These are the types of things that can end up clogging the courts for years... And never have a definitive outcome. Only the reputation of the company and the deicsion makers can be seriously injured.

All my own opinions expressed herein.

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