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4 responses total.

Consider licensing such software, rather than selling it outright.  Or charge
for maintenance and support.

Yes, licensing is a great way to protect your code.  It keeps the copyright
in your hands, allows you to get royalties when they add a gazillion users,
and lets you be gracious about the situation you describe.  I have some books
on licensing technology that you may want to look at.

Your contract *really* needs to spell out who owns copyright, limited 
license rights, etc. on any code that you do for hire.  Web programming
isn't everybody-uses-brand-M-Cobol-compiler routine, either - even if
some client pays you the top dollar "full copyright, nondisclosure, &
cherry on top" price for something, you need to retain copyright to the 
standard techniques, routines, and other boiler plate that you re-use 
on a regular basis.  (Don't sell off you land, seed corn, header files,
or libraries.) 

I sold the same translation to two different agencies, who I expect were
working for different sides of a lawsuit, but explained what I was doing. 
To the agency.  The client found out because they had left out a page and I
had translated the missing page, assuming it was there.  Then the first agency
called back and asked if I still had the translation because their client lost
it.  I had the second copy of it, with the missing page.  Nobody ever told
me who won the lawsuit.    

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