Securing source code rights upon partner exit
We conducted difficult negotiations and prepared documentation separating intellectual property in a software house employing 12 people.
One of the partners was leaving the company, and the rights to key source code were hanging in limbo. We saved the software house from paralysis and potential claims that could have destroyed their flagship product.
The challenge
At CodeNode Solutions, one of the two founders decided to pursue a different business. For 3 years, the company developed a CRM system, but the documentation was in disarray. It turned out that signed agreements for the transfer of economic copyrights were missing from 4 key developers who worked at the very beginning. The departing partner claimed that the application's main engine was his private property. The situation was tense because an external investor was waiting for an audit, and the lack of settled rights blocked the next funding round for the amount of 320,000 PLN.
Our approach
We started with a technical audit of 47 repositories on GitHub to precisely determine who and when wrote specific modules. Adam from our team spent 14 hours analyzing logs and comparing them with transfer dates. Without unnecessary talk, we moved on to negotiations. We had to act quickly because the result matters, not the process – we knew that every day of delay moved the client further from the investor's money. (By the way, Marek and Piotr still shake hands today, which is rare in such breakups).
The solution
We prepared a tripartite settlement that precisely described what code snippets remain in the company and what Marek can take to his new project. We negotiated a rights buyout amount of 42,300 PLN, which satisfied both parties. Additionally, we tightened B2B contracts for the remaining 9 team members, introducing strict provisions for IP transfer upon pull request approval. The entire documentation was closed in 2 negotiation sessions at Floriańska Street.
Results
The company regained full control over its product and successfully passed the investor audit. The partners' separation took place without court involvement and without public dirty laundry.
Timeline
-
October 2, 2023Audit of repositories and verification of 47 contracts with subcontractors.
-
October 9, 2023First round of financial negotiations between partners.
-
October 16, 2023Signing the final settlement and transfer of economic rights.
"I was afraid that the code dispute would block our development for years. The team from Krakow Advisory Market put facts on the table and closed the topic before emotions took over business."