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When Your Former Boss Sues You for Starting a Startup

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

#161
You know what is sad and wrong thing here: YC companies have reputation and perception in my mind (by reading storied about BnB, Uber, heroku, rapgenious, etc.) that my initial reaction is that Shred founders are just typical hipster white kids who stole other's people hard work.

I'm 100% wrong with my initial reaction but if I'm YC I would look into this trend and perception in public.

Again I'm wrong and there should be no judgment here.

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

#162

Earlier quoted context omitted.

Note the words "can qualify" and "may include". It's not a matter of secret keeping. It is a fact-specific analysis turning on the nature of the product and the specific information on the list. Whether or not one could theoretically gather the information from public sources, sources outside the list, is also a factor. A simple list of buyers for a simple product may not qualify regardless of attempted protections.…

California trade secrets law has not changed drastically since 2005. If you have actual information to the contrary, by all means, point to it. You're correct that there's more to it than just keeping something secret: - It has to also be valuable because of the secrecy, so the number I'm thinking in my head doesn't count. But customer lists typically do have value because of secrecy. - Trade secrecy can be destroyed…

I said the document was untrustworthy, not necessarily incorrect. It is too old to be relied upon. It's not a question of whether the material is accurate. Any lawyer advising a client would be negligent if he or she looked to such dated summaries of the law. They aren't worth reading given the many current summaries are available elsewhere. Now if the firm wants to reissue the document, then perhaps.

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

#163

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…

> On stealing "ideas," do you have some advice here? IANAL, and esp. I am not from the US so I don't really have a good grasp of the spirit of the law there (except that from the outside it is constantly surprising and scary!) however, here in the UK i have some experience, esp because i want to ship software which directly competes with my previous employers in the future... one thing to remember is that working som…

Thanks for your thoughtful comments.

Relevantly, Shred Video doesn't even compete directly with Smule for customers. Smule is building a network of karaoke singers and aspiring music enthusiasts to create music together. Shred Video is building technology to help athletes and adventure travelers make movies.

For example, it's unimaginable that a user would consider Smule apps and Shred Video to be competing substitutes that solve a similar need. She'd literally be choosing between "do I want to use this Smule app to sing karaoke songs or play guitar with, or do I want to use this Shred Video app to make a movie from my snowboarding footage?"

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

#164

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…

I've seen this kind of stunt before, in the SCO v. IBM lawsuit. Your defense is to get the court to require the other side to state specifically what they think you stole, or to drop the claim. The law is on your side here. Vague claims aren't a part of a valid lawsuit. "Failure to state a claim actionable at law" may be the phrase you need. But what you really need is lawyers, and IANAL.

Yes, thoughtful response, our lawyers are looking into this very strategy.

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

#165
post #95

Earlier quoted context omitted.

Calling Palantir evil strikes me as pretty fair.

how are they evil? I feel like I've missed something.

The name is a dead give-away. In Tolkien's stories, the palantir is a crystal ball which corrupts the mind of its user. At the least, the name strongly suggests that they lack a proper respect for the dangers of the technologies they're using.

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

#166

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…

It's fair to plead for people not to read to much into this. But your suggestion that this is a "bullshit pissing contest with 0 innocent parties" seems ridiculous to me, given that a well funded company is suing a less funded company it doesn't compete with. You think that is the most likely scenario? Really??

It certainly seems like a reach to just assume bad behavior on both ends.

Which actually, is one of the more insidious outcomes of making absurd claims against someone, even if they're completely false. People naturally respond "well, no one would be crazy enough to make something like that up, so there must be some truth to it."

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

#167

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.

Of course, if one member in a couple has $40 million dollars and the other does not, and the rich one files a lawsuit against the other without even first talking to her, one might consider that the two are not equally culpable parties.

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

#168

Earlier quoted context omitted.

Leaving the US would do little beyond increasing the cost of litigation and making said founder look more like a fugitive. Tradesecret law and IP law generally is pretty universal. And you can still get sued where the alleged theft/taking/wrong took place. A default decision (ie you don't show up) by a US court will be enforced in Canada, Europe or most anywhere else. As for free markets, while IP law does create mon…

It sounds like you agree with me then. Techniques developed for employer A CAN be taken to employer B. [as long as they are independently created ] If there is some nuance here that I'm missing, I'd like to know what it is. A finer understanding of this point is probably really important for anyone who works in science.

No they cannot be 'taken' from A to B. They must arise independently within in B. The fact B's technique looks very much like A's must be complete coincidence.

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

#169
post #84
post #73

Earlier quoted context omitted.

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.

California doesn't enforce noncompetes, which is what matters in this case.

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

#170

Earlier quoted context omitted.

> If this isn't matter isn't settled, the legal process provides the means to sort it all out and you'll have the opportunity to evaluate the evidence supporting Smule's claims as part of the discovery process. If they even make it through the discovery process without going bankrupt, which is the explicit, admitted goal of their opponent.

> If they even make it through the discovery process without going bankrupt, which is the explicit, admitted goal of their opponent. No, it isn't. According to Business Insider, this is what was stated: I'm fairly confident we will figure something out eventually, and this won't be a long-term problem. But I think they've got to face the music here. And we're going to have to figure that out unfortunately with a bunc…

The filing is public, and referred to in the lawsuit. I'll summarize here:

Smule has claimed we violated non-solicitation provision in our contract by recruiting each other to start a startup; that we appropriated Smule's code or methods to build Shred Video (though they don't make any specific trade secret claims); That Mark is guilty of fraud in his consulting relationship w/ Smule's engineers (this is detailed our post); and We converted Smule's proprietary information into Shred Video (far as I understand, conversion is a fancy word for "stealing").

The "non-solicitation" claim is laughable, especially in California. The fraud claim is fraudulent itself, as the email record clearly shows Smule itself asked for Mark's help, and he was wholly transparent in the way he provided that help. Everything else comes down to whether we used Smule's proprietary code or methods.

When Smith says "I'm fairly confident we will figure something out eventually...unfortunately...with a bunch of lawyers," seems a reasonable interpretation that "a bunch of lawyers" is code for legal threats, and "figure something out" is code for us paying him (in equity or otherwise) to withdraw the legal threat.

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