Mention ‘developer’ and ‘IP theft’ and the Mark Zuckerberg lawsuit with the Winklevoss twins comes to mind. There was an entire movie made about it called The Social Network.
It’s not just big companies like Facebook who are vulnerable to accusations of intellectual property theft. One of our customers, a freelance developer, found themselves being accused of IP theft by their client.
Accusations typically stem from a client relationship breaking down over time. So, what was the relationship like between the client and developer before the claim was made?
There were several red flags;
- The client refused to sign the developer’s contract, which included an intellectual property clause
- A series of bad management decisions by the client lead to the developer not wanting to work on the product
- There was an outstanding invoice owed to the developer for over £10,000
The client refused to pay the developer’s fees until they handed over the relevant intellectual property. A clause in the developer’s contract (which was never signed) stated they don’t hand over IP to completed projects, but instead an unlimited license to use the work they’ve done.
This formed the basis of the allegation. The client’s legal team sent a letter to the developer threatening further action if they didn’t hand over the IP.
It was at this point the developer contacted With Jack. They had a professional indemnity policy arranged through With Jack, which gives them access to a team of legal experts. The insurer appointed a lawyer to handle the situation.
Pro tip: It’s important to note that in the event a client accuses you of something, you must not admit liability or apologise without the insurer’s prior consent. This could void your insurance.
The lawyers assisted the developer in organising and preparing for a meeting with the client where a resolution was agreed. To prevent the situation from escalating, the agreement was that the developer would hand over the relevant IP and the client would pay the outstanding invoice.
This went smoothly and no further action was taken. Had the developer not had insurance, they would have been out of pocket with legal consultations or—had they not pursued that route—they could have been down £10,000+ from the fees they were owed.
We often talk about the emotional impact of these situations, too. The role insurance plays isn’t just financial, but we recognise the emotional support you get from having the backing of a team of legal experts. Without insurance, the stress of a difficult situtation will be even worse.
Insurance exists to put you back in the same financial position after a loss as you were in prior to a loss. In this case the loss was legal fees and an unpaid invoice.
All of this was resolved because the freelance developer had insurance, which starts at £14 per month.