4 ms·

What if nobody buys anything at the auction?

rwmj 8y ago
This is an interesting question because it's what has happened to a lot of old software. It's especially problematic for old games that people want to play on emulators - at the point where these companies went bust it didn't seem as if the game "IP" had any value. Anyway what definitely doesn't happen (at least in any western country) is that the software becomes "abandonware" or copyright somehow disappears. The copyright will be owned by someone for many more years, even if that person or entity is impossible to trace.
- roel_v 8y ago
  "Anyway what definitely doesn't happen (at least in any western country) is that the software becomes "abandonware" or copyright somehow disappears. The copyright will be owned by someone for many more years, even if that person or entity is impossible to trace." I actually wrote my bachelor's thesis for my law degree on this exact topic (it was titled, roughly translated from Dutch, 'Intellectual property in bankrupcty'). What you're saying is not correct (well, depends a bit on how you define 'correct'). Under Dutch law (and I have reasons to believe it's very similar in many other civil law jurisdictions), what happens is that in bankruptcy (of a corporation, it's different when a natural person dies or goes into bankruptcy) the liquidator will take over and try to sell any assets, the proceeds of which will be used to pay out the creditors. Often software (and other intellectual property rights) is either forgotten about or no buyer can be found for it. When the liquidator thinks he has sold everything worthwhile and after a judge's OK, the corporation ceases to exist. When the IP wasn't sold, it essentially becomes 'owned' by nobody. However, if it turns out that that remnant IP is worth something, a creditor can ask a judge to re-open the bankruptcy proceedings so that the IP can still be transferred. The exact grounds for this are a bit complicated and refined by case law, but for current purposes it's sufficient to say that this can only happen as long as any material claim be made by a creditor; most claims would expire after 5 years (there are nuances in when this period is 'reset' and so on). So essentially, after this period, there is nobody owning this IP. Whether that constitutes 'abandonware' depends on how one defines that term because it's not a legal concept, but after that period there is nobody who can make any claims on anyone using such IP. Of course in practice it will seldom be so clear cut; for example if (in the highly hypothetical case that) you build a $100mm company out of the orphan IP from a company that had part of its assets bought by another company, someone at some point will probably try to claim that they bought the IP as part of those assets. Then there is another quirk in Dutch law, which might have been 'fixed' a few years ago (there was talk about it when I wrote the thesis but haven't kept up with whether it actually made it into law). IP, as long as it was created and not bought by the entity going into bankruptcy, was not part of the assets a liquidator could sell to pay creditors with. So there was some part of the IP the liquidator couldn't sell, nor even transfer if he wanted to! This essentially meant that any such IP became 'open' in the sense that nobody could lay claim to it in a court of law. For software, this basically boiled down to the fact that whoever was in the position to copy the source code and destroy any backups, could become the effective 'owner' of it! (There are many pitfalls and traps, I think it would require a programmer with extensive knowledge of the history of the company and the software, and with a law degree or at least deep knowledge of the law beyond reading up for a weekend, to pull this off; but the first part is more common than you'd think, and for the second part one could work with a lawyer). In my research, I have found several cases where the lawyers, liquidators, banks and judges involved clearly didn't know the details of the law and parties could have made 100's of thousands or millions (of Euros or guilders - cases like this have been going back for a long time) had they known. I even looked into a few cases to see if there was any money to be made there by buying any 'dormant' IP and/or claims, and there might have been - but it would take significant investments to check, so I didn't/don't think it would be a viable business, certainly not for a risk-averse software/law nerd like myself.
- pishpash 8y ago
  If no one is likely to sue it's a moot point.

rwmj 8y ago

This is an interesting question because it's what has happened to a lot of old software. It's especially problematic for old games that people want to play on emulators - at the point where these companies went bust it didn't seem as if the game "IP" had any value. Anyway what definitely doesn't happen (at least in any western country) is that the software becomes "abandonware" or copyright somehow disappears. The copyright will be owned by someone for many more years, even if that person or entity is impossible to trace.

roel_v 8y ago
"Anyway what definitely doesn't happen (at least in any western country) is that the software becomes "abandonware" or copyright somehow disappears. The copyright will be owned by someone for many more years, even if that person or entity is impossible to trace." I actually wrote my bachelor's thesis for my law degree on this exact topic (it was titled, roughly translated from Dutch, 'Intellectual property in bankrupcty'). What you're saying is not correct (well, depends a bit on how you define 'correct'). Under Dutch law (and I have reasons to believe it's very similar in many other civil law jurisdictions), what happens is that in bankruptcy (of a corporation, it's different when a natural person dies or goes into bankruptcy) the liquidator will take over and try to sell any assets, the proceeds of which will be used to pay out the creditors. Often software (and other intellectual property rights) is either forgotten about or no buyer can be found for it. When the liquidator thinks he has sold everything worthwhile and after a judge's OK, the corporation ceases to exist. When the IP wasn't sold, it essentially becomes 'owned' by nobody. However, if it turns out that that remnant IP is worth something, a creditor can ask a judge to re-open the bankruptcy proceedings so that the IP can still be transferred. The exact grounds for this are a bit complicated and refined by case law, but for current purposes it's sufficient to say that this can only happen as long as any material claim be made by a creditor; most claims would expire after 5 years (there are nuances in when this period is 'reset' and so on). So essentially, after this period, there is nobody owning this IP. Whether that constitutes 'abandonware' depends on how one defines that term because it's not a legal concept, but after that period there is nobody who can make any claims on anyone using such IP. Of course in practice it will seldom be so clear cut; for example if (in the highly hypothetical case that) you build a $100mm company out of the orphan IP from a company that had part of its assets bought by another company, someone at some point will probably try to claim that they bought the IP as part of those assets. Then there is another quirk in Dutch law, which might have been 'fixed' a few years ago (there was talk about it when I wrote the thesis but haven't kept up with whether it actually made it into law). IP, as long as it was created and not bought by the entity going into bankruptcy, was not part of the assets a liquidator could sell to pay creditors with. So there was some part of the IP the liquidator couldn't sell, nor even transfer if he wanted to! This essentially meant that any such IP became 'open' in the sense that nobody could lay claim to it in a court of law. For software, this basically boiled down to the fact that whoever was in the position to copy the source code and destroy any backups, could become the effective 'owner' of it! (There are many pitfalls and traps, I think it would require a programmer with extensive knowledge of the history of the company and the software, and with a law degree or at least deep knowledge of the law beyond reading up for a weekend, to pull this off; but the first part is more common than you'd think, and for the second part one could work with a lawyer). In my research, I have found several cases where the lawyers, liquidators, banks and judges involved clearly didn't know the details of the law and parties could have made 100's of thousands or millions (of Euros or guilders - cases like this have been going back for a long time) had they known. I even looked into a few cases to see if there was any money to be made there by buying any 'dormant' IP and/or claims, and there might have been - but it would take significant investments to check, so I didn't/don't think it would be a viable business, certainly not for a risk-averse software/law nerd like myself.
pishpash 8y ago
If no one is likely to sue it's a moot point.