Ask HN: Using an LLC to protect side project IP • Hacker News Board

Re: Ask HN: Using an LLC to protect side project IP

#21

Post by jahewson » Sun, Mar 13, 2022, 8:20 AM UTC

montereynack wrote: post #6

I'll take this opportunity to plug my own question to the folks on HN - does anybody know how much protection an LLC generally provides you w.r.t. lawsuits and such? I'm currently looking at doing software consulting for a startup, but indemnification clauses have been touchy for the people I've talked to (and I'm paranoid about losing more than I gain in an unfortunate situation). My lawyer has told me that "piercin…

I don’t think you should be signing indemnification clauses at all. Think what you’re agreeing to - you’re going to defend the company in court on your own dime when they get sued?

Re: Ask HN: Using an LLC to protect side project IP

#22

Post by jahewson » Sun, Mar 13, 2022, 8:28 AM UTC

No that will not work. In fact, it makes it look like you’re trying to give them the run around.

The best thing you could do to protect IP for your side project is to talk to your employer and tell them what you want to work on and get a written exception for it.

Re: Ask HN: Using an LLC to protect side project IP

#23

Post by savato » Sun, Mar 13, 2022, 9:23 AM UTC

There are structures you could set-up which could shield you. For example, a LLC within a S-corp, where you are share holder of the s-corp (as person, trust, or with another LLC), but not owner of the first LLC. Then the LLC holds the IP, and you are now entitled to part or full ownership through shares. However, that does not shield you from lawsuits if anyone would find out.

Re: Ask HN: Using an LLC to protect side project IP

#24

Post by traceroute66 » Sun, Mar 13, 2022, 9:23 AM UTC

mdasen wrote: post #17

IANAL, but this sounds like "no." If you've signed an agreement with EmploymentCorp that any IP you create will be owned by EmploymentCorp, you can't create MyLLC and sign an agreement with MyLLC that the IP you're creating will be owned by MyLLC. You can't sign two simultaneous agreements assigning your IP to two different companies. Imagine Amazon hires you and has you agree to assign any IP to them. You then get a…

> You're basically talking about signing an agreement with your LLC that you know violates your employment agreement and signing the agreement as an officer of the LLC that the LLC knows violates the employment agreement of the person (you). Seems like that creates plenty of liability on both sides of the coin.

Not only that, but it very quickly moves the nature of the liability from civil to criminal, which then has potential further impact on you in the future.

Re: Ask HN: Using an LLC to protect side project IP

#25

Post by sjtgraham » Sun, Mar 13, 2022, 9:24 AM UTC

You can't assign something you don't own, and if you've signed an IP assignment agreement it's not yours anymore. Your best bet is to get a carve out for your specific side projects, or find a job somewhere that will accommodate you if you care enough.

*This like everything on this thread is terrible advice. You need a lawyer.

Re: Ask HN: Using an LLC to protect side project IP

#26

Post by gyulai » Sun, Mar 13, 2022, 10:04 AM UTC

Some assignment clauses are absurdly wide like "any IP you create belongs to us". This would imply absurd outcomes like when a software engineer signed that clause as part of their work contract for software company X, but also records music on weekends or reads audiobooks for librivox or stuff like that, and it's now unclear whether the IP in that music or those audiobooks might also belong to company X.

I think it's safe to assume that any such absurdly-wide assignment clause would end up unenforceable in a court of law and can thus be safely ignored.

Re: Ask HN: Using an LLC to protect side project IP

#27

Post by arghwhat » Sun, Mar 13, 2022, 10:14 AM UTC

No, that does not work. IP you create is currently governed by a contract with Company A. Signing a different contract with Company B will only make you more liable as both contracts must be adhered to, and if they both claim all IP then the only valid move is to never create any IP.

Get your current employer to approve your project through an addendum or find other employment, and in the future do not sign contracts you do not want to follow by the letter.

Re: Ask HN: Using an LLC to protect side project IP

#28

Post by jitendrac » Sun, Mar 13, 2022, 10:28 AM UTC

If possible, make it opensource with AGPL license and invite few friends to send some initial contribution, viola now you are not the only one who owns all the IPs, also your employer will be most probably stay away from it due to licensing requirements of opensourcing all the changes made. Alternatively you can create a project with your friend as main owner and contribute to it with same AGPL license. You can also contribute to it as an anonymous contributor. flip side is you will have to get explicit full ownership of the code with MIT/BSD/WTFPL type license via documented way(verified Email works fine).

Re: Ask HN: Using an LLC to protect side project IP

#29

Post by sokoloff » Sun, Mar 13, 2022, 10:36 AM UTC

AlchemistCamp wrote: post #7

rdpintqogeogsaa wrote: post #4

You seem to be looking for a lawyer. Asking concrete legal questions on a public forum is not a substitute.

A similarly brusque response could be written to many, many questions on a forum. > You seem to be looking for a doctor/lawyer/teacher/statistician/psychologist/sysadmin/_____. Asking concrete _____ questions on a public forum is not a substitute. Does that really have a positive effect, though? In my opinion, it's not a good thing for people, especially those who aren't wealthy to enough to pay every time there's so…

This seems to a case analogous to “I have this new, fast-growing, irregular-shaped mole on my forehead and I’m thinking of using Compound W on it. As long as I don’t get any in my eye, I should be OK, right?” and then someone suggesting “you really ought to see a doctor”.

Re: Ask HN: Using an LLC to protect side project IP

#30

Post by greenyoda » Sun, Mar 13, 2022, 10:56 AM UTC

gyulai wrote: post #26

Some assignment clauses are absurdly wide like "any IP you create belongs to us". This would imply absurd outcomes like when a software engineer signed that clause as part of their work contract for software company X, but also records music on weekends or reads audiobooks for librivox or stuff like that, and it's now unclear whether the IP in that music or those audiobooks might also belong to company X. I think it'…

> I think it's safe to assume that any such absurdly-wide assignment clause would end up unenforceable in a court of law and can thus be safely ignored.

Since you're apparently not a lawyer, you haven't read the employment contract and you don't even know what state this person lives in, telling them they can safely ignore a contract that they signed seems rather irresponsible.

The only reasonable advice to give here is the usual: Consult a lawyer who is licensed to practice in your local jurisdiction.