Hoboken] brought in a competitor that they said would create new software for the garage -- except the company is using our software; they kept our software without paying for it," said Dennis Clark, Robotic Parking's chief operating officer.

Hoboken's IT officer, who took over operations at the garage, said codes used to operate several dozen components were inexplicably changed overnight, according to coverage in the Hudson Reporter. Hoboken officials blamed Robotic Parking for sabotaging the software code that caused the garage to malfunction, in effect hijacking the system.

Hoboken officials said they are hesitant to comment on the situation, since they are attempting to create a suitable compromise with the company.

Short End of the Stick

In the world of intellectual property rights, disputes between software providers and customers occur frequently, and often turn into litigation, said Bill Coats, an intellectual property lawyer and partner at White and Case.

Because of this, software companies often protect their products by installing things such as "time bombs," or codes that automatically shut down the program to protect it.

"There are various things vendors put in software that gives them more leverage," Coats said. "Those can be scary when you do not realize they are in there, and find out to your dismay that the program just stopped working."

Once a software license expires, a customer has no rights, and this can lead to problematic situations, especially when software is an integral part of a functioning system.

Yet software companies have found that they can end up getting the short end of the stick when clients manipulate or steal their programs. Earlier this year, Blueport, a company that provided a computer management program to the U.S. Air Force, sued the U.S. government for copyright infringement and won. According to the judgment, the Blueport computer program contained an automatic expiration function that was circumvented by Air Force personnel, who hacked into the program and changed the expiration date. Blueport learned of the incident and was granted compensation from the court.

Because of rapid changes in technology, many agencies do not want to buy rights to software that may become obsolete in five years. Like Hoboken, many agencies lease software, but to protect themselves they should have a contractual safeguard so incidents -- such as customers' cars being held hostage in a garage -- don't occur, Coats said. One way for agencies to circumvent a professional software relationship turned sour is to include "carry-over" rights into a contract, which allow the software user leeway to find another vendor and give the user bargaining leverage.

Contracts between governments and technology providers should not pose any danger to governments if contracts are properly structured -- the key being to clearly delineate ownership and transfer intellectual property before the contract is signed, said Christopher Neff, vice president of marketing for NIC, a company that builds and manages government technology services.

"In the world of e-government, the primary concern governments have is maintaining continuity in the event of a change in service providers," Neff said, adding that government organizations need to diligently research the companies they consider doing business with by checking references and asking many questions; otherwise they run the risk of legal disputes.

Truce?

Hoboken officials felt trapped in a bad -- yet costly -- contract signed years ago by a previous parking agency, said Joe Sherman, corporation counsel for Hoboken.

"When the Parking Authority was dissolved," Sherman said, "Hoboken was stuck with a contract that didn't give them rights to the software; rather they were held hostage by the owner of the software."

Recently Hoboken and Robotic Parking issued a joint press release announcing that a settlement

Chandler Harris  |  Contributing Writer