Hi Ken,

I definitely agree with those who have advised you to determine who exactly is the owner of the source code. It's one of those issue that can surprise you since it very much depends on employment status. That's step one.

One option that is not mentioned is the possibility that your former colleague may have permission to use this code. There are a lot of companies that will allow someone to use the code without a second thought. It has no real value to them.

Another thought is that your colleague may consider this a part of his toolbox and therefore not subject to copyright.

Is this company being harmed by this person's use of the code. If I felt that this was in some way damaging the company I would feel more inclined to say "Hey, you need to know something." If it is a direct competitor, you can almost bet that they already know about it and will deal with it appropriately.

As for a moral issue, look at your motives first. That will almost always lead you in the right direction. I've done some right things for the wrong reasons and it was not a pleasant experience.

Best of luck