When Your Former Boss Sues You for Starting a Startup • Hacker News Board

Re: When Your Former Boss Sues You for Starting a Startup

#81

Post by leelin » Tue, Sep 22, 2015, 11:28 PM UTC

Maybe Smule doesn't want their code and IP floating around anywhere outside the company? Even if they trust the company doing the audit, can they trust all the employees of that company, and any future acquirers?

I'm not taking sides (because I don't know anything), but after reading this and Geoff Ralston's post, that's at least one good reason Smule wouldn't agree to the 3rd party audit that no one else has brought up.

Of course, I say this with a background in the quant hedge fund world and I doubt any decent fund would agree to voluntarily submit their most proprietary code to be reviewed by anyone.

Re: When Your Former Boss Sues You for Starting a Startup

#82

Post by aidenn0 » Tue, Sep 22, 2015, 11:28 PM UTC

thoman23 wrote: post #78

tptacek wrote: post #67

Earlier quoted context omitted.

That's probably not even close to true. Without wading into the morass of what an "idea" is, a boilerplate employee agreement might list things like: technical information, methods, processes, formulae, compositions, systems, techniques, inventions, machines, computer programs, research, business information, customer lists, pricing data, sources of supply, financial data, and marketing, production, or merchandising…

@aidenn0 > "Our marketing research shows that there is a $3B market for an app that does X" <-- likely protected. ----- I don't see how even that would or should be protected.

Covered under "business information" in the boilerplate that tptacek posted.

Re: When Your Former Boss Sues You for Starting a Startup

#83

Post by lasryaric » Tue, Sep 22, 2015, 11:29 PM UTC

Can someone explain why a company being sued needs a lot of money to survive?

Re: When Your Former Boss Sues You for Starting a Startup

#84

Post by tptacek » Tue, Sep 22, 2015, 11:30 PM UTC

aidenn0 wrote: post #73

tptacek wrote: post #67

Earlier quoted context omitted.

That's probably not even close to true. Without wading into the morass of what an "idea" is, a boilerplate employee agreement might list things like: technical information, methods, processes, formulae, compositions, systems, techniques, inventions, machines, computer programs, research, business information, customer lists, pricing data, sources of supply, financial data, and marketing, production, or merchandising…

All of those are more tangible than "ideas." IANAL, but here's an example: "It would be cool to make an app that does X" "Our marketing research shows that there is a $3B market for an app that does X" [edit] Also, many states allow enforcement of non-compete agreements, and in some cases that may include areas the company is planning on entering at the time of your employ.

Almost all states enforce noncompetes, not that it's clear to me what noncompetes have to do with this.

I think you should talk to a lawyer before making assessments about how unlikely it is something is to be protected. Generally: safest course is to assume it is protectable.

I talked to a lawyer before starting this company and I was very surprised by how many pitfalls I hadn't even considered.

Re: When Your Former Boss Sues You for Starting a Startup

#85

Post by mikeshreds » Tue, Sep 22, 2015, 11:31 PM UTC

tptacek wrote: post #67

aidenn0 wrote: post #50

Earlier quoted context omitted.

How can you steal an idea? There is little to no protection for ideas. More tangible information may have a lot of protection, but ideas are more-or-less fair game.

That's probably not even close to true. Without wading into the morass of what an "idea" is, a boilerplate employee agreement might list things like: technical information, methods, processes, formulae, compositions, systems, techniques, inventions, machines, computer programs, research, business information, customer lists, pricing data, sources of supply, financial data, and marketing, production, or merchandising…

Yes, in legalese those would be considered trade secrets. Tellingly, Smule did not name "theft of trade secrets" as a claim in their lawsuit.

Re: When Your Former Boss Sues You for Starting a Startup

#86

Post by mikeshreds » Tue, Sep 22, 2015, 11:32 PM UTC

thoman23 wrote: post #74

[deleted] wrote: post #64

Earlier quoted context omitted.

[deleted]

"and you guys can all be friends". What world are you living in? This man is trying to destroy their livelihood. It's almost like a direct physical attack on them and their families.

thoman23. You so get me right now.

Re: When Your Former Boss Sues You for Starting a Startup

#87

Post by dmourati » Tue, Sep 22, 2015, 11:32 PM UTC

shostack wrote: post #4

Genuinely curious for your legal counsel's take on you posting such an article publicly. I've always thought the prevailing wisdom shared by all lawyers was "don't talk." Also, in this day and age of using services like Github for personal projects but having access to other repos, etc., using things like 1Password for work and personal things, how has the discovery process worked with everything? I'm really interest…

"I'm not mad, I'm proud of you. You took your first pinch like a man and you learn two great things in your life. Look at me, never rat on your friends and always keep your mouth shut." -- Jimmy Conway, Goodfellas

Re: When Your Former Boss Sues You for Starting a Startup

#88

Post by hga » Tue, Sep 22, 2015, 11:33 PM UTC

sandworm101 wrote: post #80

grizzles wrote: post #66

Earlier quoted context omitted.

lol @ preposterous. That's the law yo. Copyright - Source code that has been copied. Patent - Monopoly on an idea. Trade Secret Law - N/A. They are former employees. Non Compete Agreement - Agreements in restraint of competititon are void in California. Shred's story sounds credible to me. The fact that Smule offered to make this lawsuit go away in exchange for equity sounds a lot like extortion to me. Why would they…

>Trade Secret Law - N/A. They are former employees. Non Compete Agreement - Agreements in restraint of competititon are void in California. I would respectfully disagree with these assertions. Trade Secret is not void just because someone is a former employee. You don't get to walk out the door with the secret recipes. And there are many exceptions to california's ban on non-compete agreements. Non-compete agreements…

You don't get to walk out the door with the secret recipes.

Indeed, but in general in the US you have to go to real efforts to create and keep secret such recipes. And I find it utterly amazing that California law, last time I checked, doesn't consider customer lists to be protectable trade secrets for salesmen (!!!).

Re: When Your Former Boss Sues You for Starting a Startup

#89

Post by ClintEhrlich » Tue, Sep 22, 2015, 11:33 PM UTC

sandworm101 wrote: post #53

mikeshreds wrote: post #41

Earlier quoted context omitted.

Hi Paul thanks for your comments. In the code comparison, the 3rd party will also be able to look at methods (in addition to code copied directly). We're more than happy to include proprietary methods in the review. On stealing "ideas," do you have some advice here? Smule has never specified what ideas they think we stole. What do you think is our burden of responsibility in proving we did not steal ideas our opponen…

"Ideas" isn't a form of IP that can be stolen. Did you patent anything? Have you appropriately protected these ideas to qualify for any sort of tradesecret protections? (ps. Don't answer. This is the sort of thing to be discussed with an attorney behind a closed door.)

That's not quite accurate: "Ideas" cannot be patented or copyrighted, but they can be protected by contract.

The distinction is who the right to the idea is enforceable against. A patent represents a government enforced monopoly that bars anyone from using the specific intellectual property, whereas a contractual right to an idea can only be enforced against the other party to the agreement.

In California, the seminal case is the Supreme Court's decision in Desny v. Wilder, which held that a screenwriter could enforce a studio's promise not to use one of his ideas without his consent. The Court's reasoning was that while a party is free to come up with its own ideas, the disclosure of someone else's idea confers a benefit. Federal courts have addressed this issue a lot in a line of cases holding that Desny claims are not preempted by the Copyright Act.

I haven't been involved in any cases where the alleged theft of an idea involved an employment contract, but I see no reason why the same principles would not apply. Logically, an employer should be able to disclose propriety ideas to its employees without fear that they will be stolen, regardless of whether the ideas are sufficiently novel to qualify for an exclusive federal monopoly.

Re: When Your Former Boss Sues You for Starting a Startup

#90

Post by sandworm101 » Tue, Sep 22, 2015, 11:33 PM UTC

lasryaric wrote: post #83

Can someone explain why a company being sued needs a lot of money to survive?

(1) Lawyers are expensive.

(2) Going to court without a lawyer is even more expensive.

(3) With an outstanding legal issue the company will find it hard to access credit.

(4) Many assets may be locked-down pending the outcome of the lawsuit, making it difficult to sell things, enter into new contracts or use said assets as collateral on loans.