He has a user on his forum threatening legal action because the user feels like he is being extorted to pay the $699 source code fee to get the latest version with no licensing activation.

He should offer a free upgrade to v4.1 so all the users can still use the software once the company closes down their activation servers. Maybe not a free source code version, but a free upgrade to v4.1 would be in order.

All of the older version users have to activate their version of the software and it will be useless once the activation servers go offline.