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

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

#111

Post by jfoutz » Tue, Sep 22, 2015, 11:59 PM UTC

david_shaw wrote: post #61

paulsutter wrote: post #30

My first instinct is to congratulate Shred for standing up to the big bully. That was really almost what I posted. But pick apart Shred's note, and really it's an emotional appeal based on two ideas: 1. That the sole test of stealing ideas is source code that has been copied verbatim. 2. That the only possible secrets of Smule are features implemented in released products. These are pretty weak legs to stand on. They…

I appreciate this unbiased view. You're absolutely right that reading emotional appeals online is a slippery slope. However, reading this Business Insider article about the case ( http://www.businessinsider.com/smule-ceo-shred-video-lawsuit... ) really underscores the apparent sleaze on Smule's side: > You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to…

I wonder if it's possible to optimize the cost differential. (probably not for a 2 person startup, but maybe a little bigger). But once it's terminal, clear you can't win, just dump all the money into making lots of specific, esoteric claims that require Giant Law Firm to spend hundreds of hours researching and responding to.

Loser pays legal fees, but if i can get you to spend an order of magnitude or two more than my dying company is worth, well, that's the kind of flameout i could take some satisfaction in.

edit

Now that i think about it a bit, contacting the oppositions' customers and asking about their record retention policies seems like a great way to go. not a subpoena, just several repeated enquiries, an email, a letter, follow up with a phone call or two about about how do you store records, how many records might you have about opposition company, who are the employees who interact with the opposition company. Hit the VP's of HR, Accounting and whoever does legal.

You could probably get some really nice targeted facebook advertising for that set of people, "been scammed by x? call us"

Social engineering is scary.

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

#112

Post by hga » Tue, Sep 22, 2015, 11:59 PM UTC

sandworm101 wrote: post #105

mikeshreds wrote: post #92

Earlier quoted context omitted.

Just want to point out that Smule has not cited trade secret theft as a claim against us. And on non-compete, Mark and I were just employees, not officers of any sort. Neither of us was a manager with direct reports.

There are two ways to 'win' a civil suit. Counter their allegations, or assert your own counterclaims. It may be possible to assert that they have taken your trade secrets. Talk to lawyers. In offices. Not online. Sign a client agreement. Pay them money. Beyond that, you cannot get any reliable advice from anyone here.

There's also the "run out the clock" method, i.e. drain the other company of money, energy, time, etc.

Which appears to be exactly the worst case the plaintiff is imaging per the words he was rather unwise to utter in an all hands meeting (http://www.businessinsider.com/smule-ceo-shred-video-lawsuit...):

[...]

And here's the sad truth. You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win.

Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win....

(Note: discovery can be very expensive, and depositions tend to take a lot of time in preparation and the actual deposition.)

Which suggests the defendant isn't entirely insane to try to win this in the court of public opinion, a worst case apparently not imagined heretofore.

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

#113

Post by mentat » Wed, Sep 23, 2015, 12:03 AM UTC

sandworm101 wrote: post #110

grizzles wrote: post #99

Earlier quoted context omitted.

There was no "misappropriation" here. Employment does not qualify as "improper means". [1] Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again. [1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets…

Yes. That is reality. Talk to anyone in aerospace. Techniques developed for employer A cannot be taken to employer B. I'm not saying it doesn't happen, just that there are laws on the books to prevent it. Imagine the slippery slope if former employees of Coke were allowed to take the recipe over to Pepsi. We wouldn't have any long-lived product lines. (That actually happened. Pepsi called the FBI) For below: 18 U.S.…

What laws?

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

#114

Post by keypusher » Wed, Sep 23, 2015, 12:13 AM UTC

grizzles wrote: post #99

sandworm101 wrote: post #80

Earlier quoted context omitted.

>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…

There was no "misappropriation" here. Employment does not qualify as "improper means". [1] Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again. [1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets…

But that's exactly how it works. I have worked at a company that did a "clean room" reimplementation of a competitor's product. You cannot have anyone who was formerly an employee of the other company anywhere near a project like that. It's not that you will be prosecuted as a criminal, it's so that your company has some defense against being sued.

https://en.wikipedia.org/wiki/Clean_room_design

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

#115

Post by [deleted] » Wed, Sep 23, 2015, 12:17 AM UTC

grizzles wrote: post #99

sandworm101 wrote: post #80

Earlier quoted context omitted.

>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…

There was no "misappropriation" here. Employment does not qualify as "improper means". [1] Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again. [1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets…

[deleted]

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

#116

Post by rayiner » Wed, Sep 23, 2015, 12:18 AM UTC

paulsutter wrote: post #30

My first instinct is to congratulate Shred for standing up to the big bully. That was really almost what I posted. But pick apart Shred's note, and really it's an emotional appeal based on two ideas: 1. That the sole test of stealing ideas is source code that has been copied verbatim. 2. That the only possible secrets of Smule are features implemented in released products. These are pretty weak legs to stand on. They…

Reading stories from parties to litigation is like listening to a couple that just broke up discuss whose fault it was. You gotta read between the lines.

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

#117

Post by grizzles » Wed, Sep 23, 2015, 12:19 AM UTC

sandworm101 wrote: post #110

grizzles wrote: post #99

Earlier quoted context omitted.

There was no "misappropriation" here. Employment does not qualify as "improper means". [1] Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again. [1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets…

Yes. That is reality. Talk to anyone in aerospace. Techniques developed for employer A cannot be taken to employer B. I'm not saying it doesn't happen, just that there are laws on the books to prevent it. Imagine the slippery slope if former employees of Coke were allowed to take the recipe over to Pepsi. We wouldn't have any long-lived product lines. (That actually happened. Pepsi called the FBI) For below: 18 U.S.…

sandworm101: That's a really interesting comment. It sounds very anti free market to me, but I guess I'm not surprised. I guess the only recourse for a founder led company in that situation would be to leave the US. Not necessarily a great result.

OT: Regarding the Coke/Pepsi thing, personally I think food manufacturers (I use the term loosely) should be forced to disclose what's in their products. Though I would strongly agree that this comment has nothing to do with the rest of our previous discussion.

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

#118

Post by brongondwana » Wed, Sep 23, 2015, 12:20 AM UTC

rancur wrote: post #23

jegutman wrote: post #14

Earlier quoted context omitted.

Depends on the company. PR is a proportional thing. If the CEO of a company is caught on video killing kittens that can kill 50% of a $100,000,000 company or 50% of $1,000,000 company. Public relations / branding is proportional in that way. Money on the other hand is slightly more constant, so in the two cases above it might be a 2 million dollar hit to each. A possible gamble to the 100 million dollar company but n…

> is caught on video killing kittens ?

http://www.abc.net.au/news/2015-09-09/dentist-walter-palmer-...

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

#119

Post by nness » Wed, Sep 23, 2015, 12:23 AM UTC

tlrobinson wrote: post #107

paulsutter wrote: post #30

My first instinct is to congratulate Shred for standing up to the big bully. That was really almost what I posted. But pick apart Shred's note, and really it's an emotional appeal based on two ideas: 1. That the sole test of stealing ideas is source code that has been copied verbatim. 2. That the only possible secrets of Smule are features implemented in released products. These are pretty weak legs to stand on. They…

"source code that has been copied verbatim." There are tools that will detect source code with similar but not identical structure.

Lexicographic analysis, I think it's called. Back at university, they would run checks against the byte-code (Java, woo) to find people who were sharing their source. Caught a few people out in the earlier years who thought changing variable names was enough to avoid plagiarism.

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

#120

Post by fr0styMatt2 » Wed, Sep 23, 2015, 12:28 AM UTC

thoman23 wrote: post #98

hsod wrote: post #27

Earlier quoted context omitted.

Isn't it possible that there's another side to this?

First, I believe them when they say they didn't steal anything. But second, and more importantly, I find it highly unlikely that even if they technically violated some agreement somewhere that it would play any significant role in the success or failure of Shred Video. I think it's just anti-competitive, greedy, ill-will to not allow former employees to succeed or fail based on how well they execute their new venture…

Exactly this in the opposite way too - I don't see how Shred Video could hurt Smule. The way I see it there's no problem with them both coexisting, it's not like it's a tiny market or anything. Just seems so unnecessary on the part of Smule and just seems vindictive and pointless. Smule could just, you know, compete with their products if they felt threatened. Isn't that what a market is?

I was also a huge Smule fan and would recommend their apps to people looking for interesting music making tools. Not anymore. Will be doing quite the opposite actually.