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I have been working on creating software for a client for the past 12 months to replace a commercial system that they have not been happy with. They're up for renewal on their commercial software, and there is a clause in the license agreement that states they will agree to not develop or help develop any competing software.

Would this be enforceable? I've googled for hours, but can't find a specific answer to this question, which is: Can a company legally prevent a client from creating a competitive software package? I think not, but I'd like to know the details.
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Sergey Alexandrovich Kryukov 6-Apr-11 14:08pm    
OP commented:

I'm not planning an taking anyone's comments here as valid U.S. Law. I was hoping that someone had experience with this, and could point me to a website that does contain U.S. law, or a verdict from a court case over this type of issue.

The person to ask is a lawyer and, unless anyone here is a lawyer, I would ignore what they tell you. Of course, you shouldn't ignore what I just told you but I'm not a lawyer...
 
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#realJSOP 6-Apr-11 13:24pm    
Quite the conundrum...
R. Giskard Reventlov 6-Apr-11 13:29pm    
:-)
Sergey Alexandrovich Kryukov 6-Apr-11 14:07pm    
How do you exit from this recursion? :-) My 5, anyway.
I think sharing opinion on the matter makes some sense; it only should be understood appropriately. After all, there are legal documents and practices...
Please see my Answer as well.
--SA
As digital man stated, I would ask a lawyer.

But maybe this bit of text from Wikipedia, adapted to suit this thread's needs, says it in better words:

WIKIPEDIA Q&A DOES NOT GIVE LEGAL OPINIONS

Wikipedia This thread contains articles posts on many legal topics; however, no warranty whatsoever is made that any of the articles posts are accurate. There is absolutely no assurance that any statement contained in an article this thread touching on legal matters is true, correct or precise. Law varies from place to place and it evolves over time—sometimes quite quickly. Even if a statement made about the law is accurate, it may only be accurate in the jurisdiction of the person posting the information; as well, the law may have changed, been modified or overturned by subsequent development since the entry was made on Wikipedia Codeproject.

The legal information provided on Wikipedia this thread is, at best, of a general nature and cannot substitute for the advice of a licensed professional, i.e., by a competent authority with specialised knowledge who can apply it to the particular circumstances of your case. Please contact a local bar association, law society or similar association of jurists in your legal jurisdiction to obtain a referral to a competent legal professional if you do not have other means of contacting an attorney-at-law, lawyer, civil law notary, barrister or solicitor.

Neither the individual contributors, system operators, developers, nor sponsors of Wikipedia this thread nor anyone else connected to Wikipedia this thread can take any responsibility for the results or consequences of any attempt to use or adopt any of the information or disinformation presented on this web site thread.

Nothing on Wikipedia.org or of any project of Wikimedia Foundation Inc. this thread should be construed as an attempt to offer or render a legal opinion or otherwise engage in the practice of law.


:-)

Did I mention to ask a lawyer?
 
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Sergey Alexandrovich Kryukov 7-Apr-11 1:01am    
Well, there are many reasonable points there, my 5.

I don't know, maybe you ironically refer to my references to Wikipedia. Well, they are just references, not more than any other references. That's why I put some disclaimer. Your own post can be classified exactly as that -- I'm sure you understand it.

Cheers,
--SA
Smithers-Jones 7-Apr-11 1:12am    
Hi, SAKryukov. Nope, I didn't refer to your Wikipedia-links, since I posted my answer before you posted yours. ;-) My answer is the standard-Wikipedia-disclaimer for every entry there related to law. I adjusted it a bit though, to fit the gerenal theme :-) Cheers, S-J
Sergey Alexandrovich Kryukov 7-Apr-11 1:38am    
Yes, I realized that. Pretty nice.
Thank you.
--SA
Companies do that. I heard it is virtually impossible to enforce; somebody even advised me: "just forget it". I also know that many papers you sign with business in real life are not legally meaningful, because some legislation can take precedence. Indeed, I hardly can imagine the term "competing" can be strictly defined and applied to each case. Also, there is a "reasonable restriction on employee's ability to earn a living", that is, the plaintiff should show that the employee would be able to earn for living despite of non-compete covenant. How anyone could proof such thing?

Nevertheless, let's look at the legal situation: the law defines where is can be enforced; and it depends on the country and state (you work in US, right?), see http://en.wikipedia.org/wiki/Non-compete_clause[^].

Violation of someone's intellectual property is completely different thing, of course; the lawsuit is quite possible here (http://en.wikipedia.org/wiki/Intellectual_property[^]).

Disclaimer. I not an expert in this topic and cannot assume any responsibility for the information I just shared. This is no more that my private opinion on the subject.

—SA
 
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Espen Harlinn 6-Apr-11 16:50pm    
Good links :)
Sergey Alexandrovich Kryukov 6-Apr-11 18:57pm    
Thank you, Espen.
--SA
The answer is that yes it can - depending on the phrasing of the agreement.

Smithers-Jones has a very good point : ask a lawyer.
But read through the agreement first, and be prepared to question the lawyer to make sure that he has actually read the whole thing through.

Regards
Espen Harlinn
 
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Sergey Alexandrovich Kryukov 7-Apr-11 0:58am    
Well, a good point, especially about questioning the lawyer. My 5.
In real life, the problem is very delicate; and enforcement is problematic. However, in real legal practices in US one can expect most wild and crazy things.
--SA
Espen Harlinn 8-Apr-11 3:43am    
Thanks, SAKryukov!
That usually means you can't create a commercially available product that competes against the product you're using. If they're writing code for in-house use only, they have nothing to worry about. Even if they did want to sell it, they could stop using the competing software, wait a year, and probably be legally untouchable.

Many times, you'll see something like that in code libraries, where you can distribute the library with your applications, but you can't create a product that utilizes that library if it will compete in the same market or for the same purpose.

I'm not a lawyer, but I did stay at a Holiday Inn Express last night.
 
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Smithers-Jones 6-Apr-11 13:47pm    
And was it a pleasant experience? Staying in the Holiday Inn Express? :-)
Chris Meech 6-Apr-11 13:49pm    
Good general answer. Did the hotel have good coffee in the morning?
Sergey Alexandrovich Kryukov 6-Apr-11 14:11pm    
This is more complex than that. Please see my Answer (and the reference).
--SA

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