GPLv3 and network interactive applications

[joedoe1905]

I have some questions about the implications of the GPLv3 for programs
that are operated remotely from a web interface. I hope to receive
some comments from you before we consider seeking legal advice.

We run a small company which has developed a number of multimedia
related software tools, most of which we distribute under the GPL. Our
revenue comes from support services, explaining why we encourage our
customers to share the tools with others, and we also received
valuable bugfixes and new features in return, much in agreement with
the open source 'philosophy'.

With the hype about web applications we saw the possibility that
somebody took our source code, modified it for their purposes and made
it accessible from the internet, thus circumventing the GPL
requirement that they publish the changed sources together with
'distributing' the code. During the discussion of the GPLv3 draft it
became clear that this loophole was one of the points that should be
fixed with the new GPL version. So we changed the licenses of all our
recent developments to GPLv3 as soon as it was finalized.

Unfortunately our pessimistic anticipations became truth. A company
larger than ours seems to be operating our tools with a javascript
interface on their website without mentioning the origin, supplying
the source code of our original software or of their changes. We are
reluctant to accept that they profit from our work in a way that is
possibly violating the license agreement without returning something
to the open source community.

Although we considered this to be an obvious violation of the GPLv3 at
the moment when we decided to migrate to that license version, we are
not sure any more. When returning to the finalized GPLv3 wording we
found the sentence
`To "convey" a work means any kind of propagation that enables other
parties to make or receive copies. Mere interaction with a user
through a computer network, with no transfer of a copy, is not
conveying.'
Does this imply that the other company is still using our work in
agreement with the GPLv3?

Further investigations on this question revealed that we had probably
better chosen the Affero AGPLv3 license (http://www.fsf.org/licensing/
licenses/agpl-3.0.html) which explains one of the differences to the
GPLv3 with:
'The GNU General Public License permits making a modified version and
letting the public access it on a server without ever releasing its
source code to the public.'
Can somebody please confirm that we are on the safe side, if we now
change to the AGPLv3 in order to enforce our intentions as described
above?

I am looking forward to a general affirmation that what I wrote
doesn't reveal apparent misunderstandings. Later I'd like to become
more specific, because the mentioned website also displays
documentation, icons and images that are included in our software as
well as media processing scripts that are generated by our software.

Cheers,
Joe