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Buachaill, Barrister
Category: UK Law
Satisfied Customers: 10539
Experience:  Barrister 17 years experience
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Our IT company is withholding our server password which they

Customer Question

Our IT company is withholding our server password ***** they changed on the basis that they own this as their intellectual property (even though it is the password ***** the server we own and is on our site) due to us not paying our IT support agreement for the next period. We are arguing that we do not want to proceed with them, however they are saying we are tied into them for a 3 year period where we are saying we only agreed a 1 year period.
Can they withhold our password ***** we need this to give to our next chosen IT supplier whom we want to take over our support and they can't do anything without this password? Is it legal to withhold this whilst we argue over the contract terms, we are adamant we only have a 1 year agreement and they are saying it is three years and that we need to pay the next 2 years as per the Agreement, after payment should we wish to go elsewhere then they will provide the password ***** all outstanding invoices have been paid. What is our position please?
Submitted: 1 year ago.
Category: UK Law
Expert:  Buachaill replied 1 year ago.

1. At the outset, the position of the IT company is untenable. Even if you accept their (incorrect) argument that the password ***** ***** property which they created, the gave you a licence to use this intellectual property, including the password. The IT company cannot unilaterally revoke this intellectual property licence for non payment of continuing support fees. The IT company would need a specific power in a contract, signed by you, and with the draconian penal clause also signed by you, in order to have this power. The IT COMPANY cannot withhold the password ***** a dispute about continuing fees or about the length of the contract. As regards ***** ***** of a contract, any party can at any time repudiate an agreement and elect to pay damages to end the contract. So you can bring this contract to an end and the IT COMPANY would then be under a duty to mitigate their loss and seek work elsewhere. This means that in practice that their loss would be very little. However, the ending of an IT Agreement does not give the provider of the IT and intellectual property the right to remove all the intellectual property paid for. The licence fo rthe intellectual property and the sale of the intellectual property has taken place and the IT company no longer has rights over it. Here, I would advise you to get a hacker to hack into the password ***** then tell the IT COMPANY where to go. You can buy a programme on the internet if you are an experienced IT PERSON to hack the password.

Expert:  Buachaill replied 1 year ago.

2. Then send a solicitor's letter to the IT Company making clear you will SUE THEM if they persist. Make clear they have sold the software intellectual property and they will be met with an injunction if they seek to persist in their blackmail attempts at prolonging an uneconomic agreement which you do not wish to continue as relations have broken down irreconciliably between you both.