Friday, November 15, 2013

Famous Person Won't Pay for Web Work

Dear Rich: I designed a blog for a certain very famous person several years ago, and everyone was happy. This past summer, I outlined a list of updates that I would suggest making, and they agreed that those were all a good idea, so I wrote up an estimate and started work. Work was submitted for review by them in July. The review took forever, I issued an invoice at the end of August (I hadn't heard anything and didn't want to wait), the famous person got grumpy, didn't pay the invoice for 2 months, then sent me 40% last week with an email saying it took too long to complete and they wouldn't pay the balance until sometime in December. I gave them notice that this wasn't acceptable, and, when I didn't hear back from them within 24 hours, I suspended their access to the backend of their website. The site remained live and active, and nobody but them would know what was going on. This is a pretty standard practice in this industry, much like when one doesn't pay one's electric bill, and it successfully got their attention, for better and worse. They decided they no longer want to work with me (no problem here!), and asked me to surrender access to all domain hosts and registrars etc, as well as sign a confidential settlement agreement. I've given them access to all sites and registrations and everything that they can legally consider theirs. I've even agreed to let them continue using my creative work (the theme that the blog uses) as long as I get paid for it and can take credit for my work. 2 pretty basic things. The problem is the settlement agreement. This is what I do for a living, and I don't want to remove the site from my portfolio, but they want that to be a term of the settlement agreement. They insist that I not link to the site or use the famous person's name. I pushed back and added a clause declaring the design and programming to be mine, and they have yet to get back to me about that. Because I've given them access to everything they need to transfer the website, they have begun transferring everything over to a new server, including my intellectual property, and I'm pretty sure that they won't negotiate on the settlement agreement until they've completely removed the site from my servers.We're about to enter a situation where I have no leverage, and they won't agree to pay me unless I sign a contract agreeing to their terms.  Should I take measures to stop them from transferring the part of the site that is my intellectual property? Should I issue a cease-and-desist since they're currently using my intellectual property without my permission? The only two things I care about are getting paid for work done months ago and being able to take credit for my work. We think you're likely to be outgunned in a legal battle. Here's why:
  • Unless you had a contractual right to do it, turning off "under-the-hood" access could work against you.
  • If you started the work without approval, that may relieve or reduce the famous person's obligations.
  • As for your contribution to the look and feel of the site -- "the theme" -- you could have a hard time claiming proprietary rights
  • Alternatively a court may determine that you granted the famous person a nonexclusive implied license to use your theme. 
  • Even if you prevail, the costs will easily exceed any potential payout (unless you have an attorney fees provision). 
So what about settling? You want credit and payment. Famous people are picky about who can use their name for promotional purposes so you need a workaround for the credit and portfolio rights. Perhaps there is some special language you can agree upon that will satisfy all the parties -- for example a statement in your portfolio that the reference is not intended to imply famous person's endorsement. (In the future, try to negotiate credit before you start work.) If you use any backend software programming and coding tricks -- the things that you developed and routinely use to make your job easier -- then retain rights to continue using those.  Have an attorney review the settlement. Try to get payment in full at the time of signing. You want to walk out with the money.

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