When Your Former Boss Sues You for Starting a Startup

I'm in the middle of writing an article about startups and attorneys. Normally I write articles for attorneys to read, but this time I'm trying to write for startups. This story falls right into the "hate lawyers" mentality I;m trying to address.

They seem to have not adopted appropriate procedures for exiting an employee. Nor did they have appropriate advice on handling IP issues. This is evidenced by the article's conflation of copyright (the literal code) function (what the code does) and tradesecrets. Whether the code enables the same features is not the issue. It is very possible that he stole and used code in an altogether different product. It is also possible that he stole said code and didn't use in any other product. That can still be a copyright/tradesecret violation.

Having legal advice at hand can prevent these situations in the first place. It doesn't cost much to have a lawyer drop by for an afternoon each month. I do quick IP lectures all the time at small outfits. Making sure new employees and current managers understand what IP actual means can really calm the waters.

Yes, I completely agree. Thing is, we'd have to go through the full legal process before we could pursue that. Smule filed the lawsuit months before we even had a product or got into YC, they probably thought we wouldn't make it this far, let alone another two years.

I have no questions but I just want to chime in to say good luck. You're fighting the good fight here and that's awesome.

I'd be inclined to agree but it seems like they've talked to YC and it's endorsed by them as well: https://twitter.com/paulg/status/646448913566687232

IMHO, your legal counsel provides advice, but that's it. You're already sitting on the receiving end of bullying with an existential threat, so there's a strategic choice (talk/don't talk) with risk on either side.

As a founder who has taken on a legal threat from a big-corp before, know that bigger companies are in the habit of being bullies like this, because they get away with it far more than they should, and they might not even realize how stupid it is. Big-corp's lawyers are simply incentivized to rack up billable hours, legit or not.

But when you can make it clear to big-corp's strategic decision makers that there's far less upside than they expect (including that they have practically zero chance of winning anything), and far more downside (including that they will really look like idiots in front of their customers, their employees, future strategic partners, etc), big-corp usually calls off its lawyers and moves on to the next person on their hit-list. They're usually rational enough not to pursue negative-ROI activities for very long simply for vengeance. If the threat of going public isn't enough to make them back down, it's ugly, but you've got to follow through.