Ask HN: My startup is suing a company and I need help

#1

Post by throwaway1028 » Wed, Oct 19, 2011, 2:39 PM UTC

We've spoken with multiple lawyers and have a very solid case. We'll likely be duking it out in the US court system. We've exhausted all other options.

This will be my first real experience dealing with the law & order and I admit I'm pretty green to the subject. If you have any resources, books or advice which you believe would aid us in learning more about the system I know we'd be grateful.

A little background:

My startup of 9 months was recently stonewalled by a partnering company who provides various datasets for licensing. In short: they've "stolen" our idea and are now preventing us from licensing their data because it's going to compete with a project they're working on.

Re: Ask HN: My startup is suing a company and I need help

#2

Post by egiva » Wed, Oct 19, 2011, 2:53 PM UTC

Step number one - don't go to court after speaking with just one lawyer or firm. Seek multiple legal opinions before filing. I can't stress enough the importance of this. Also, ask specific questions about how things might go wrong - including whether or not the other company can require you to pay their court fees if you lose.

Secondly - think about the size of this company and what might happen if you win, but they appeal the case. Be very wary, because some companies will have a large financial incentive to fight you through various cases and appeals. The reason for this is that allowing you to win your case sets a precedent that affects their other business dealings with other partners.

Finally, ask them what happens if the other party counter-sues you, who pays those fees for your defence, etc.

PS - I'm not a lawyer, so this is not legal advice. Just devote the majority of your time considering what might go wrong, and ask hard questions of your lawyer before you go to court. Winning in court, unfortunately, isn't always about who has the best legal argument, but rather who has the best defense in terms of legal resources, money, etc. Make sure you have enough resources for the entire process.

Re: Ask HN: My startup is suing a company and I need help

#3

Post by throwaway1028 » Wed, Oct 19, 2011, 3:09 PM UTC

egiva wrote: post #2

Step number one - don't go to court after speaking with just one lawyer or firm. Seek multiple legal opinions before filing. I can't stress enough the importance of this. Also, ask specific questions about how things might go wrong - including whether or not the other company can require you to pay their court fees if you lose. Secondly - think about the size of this company and what might happen if you win, but they…

So far we've walked away from all meetings feeling as though our case has some serious weight to it. We've even run it by members of our families who practice law and have received the same sort of response.

Thanks for the advice I'm making a note of it all and have updated the post to mention that we have in fact spoken to multiple firms. Should have been clear on that.

Re: Ask HN: My startup is suing a company and I need help

#4

Post by egiva » Wed, Oct 19, 2011, 3:21 PM UTC

throwaway1028 wrote: post #3

egiva wrote: post #2

Step number one - don't go to court after speaking with just one lawyer or firm. Seek multiple legal opinions before filing. I can't stress enough the importance of this. Also, ask specific questions about how things might go wrong - including whether or not the other company can require you to pay their court fees if you lose. Secondly - think about the size of this company and what might happen if you win, but they…

So far we've walked away from all meetings feeling as though our case has some serious weight to it. We've even run it by members of our families who practice law and have received the same sort of response. Thanks for the advice I'm making a note of it all and have updated the post to mention that we have in fact spoken to multiple firms. Should have been clear on that.

I paired down the last comment just to make it informative for other readers who might have a similar problem, so perhaps this doesn't all apply to your case.

Lawyers in your family provide good legal advice, but make sure to seek third-party advice from lawyers who have worked in your industry for 10+ years. They will be more aware of precedents, what your chances are, etc.

Re: Ask HN: My startup is suing a company and I need help

#5

Post by gyardley » Wed, Oct 19, 2011, 3:29 PM UTC

Good lord, what a waste of your time and money and emotional energy when you could be working on your startup.

How much time and energy have you put into this already? That's a sunk cost - it's gone, not matter what you do, but I wouldn't do a minute more. Tell the lawyers you've decided not to bother and get back to work.

I'm sure you have a solid case, and that every fiber of your being is crying out for justice. You might even win. But even if you do, what you're going to get out of this lawsuit is almost certainly going to be less than the opportunity cost of pursuing it.

Re: Ask HN: My startup is suing a company and I need help

#6

Post by drallison » Wed, Oct 19, 2011, 3:39 PM UTC

It might be time to review your start-up's intellectual property situation and file for those patents you've been intending to apply for, but have not gotten around to doing so. Would your intellectual property block others from competing? Note that the "new" patent law changes the priority of patents from "first to invent" to "first to file" at some point in the future (2013?).

Re: Ask HN: My startup is suing a company and I need help

#7

Post by throwaway1028 » Wed, Oct 19, 2011, 3:43 PM UTC

gyardley wrote: post #5

Good lord, what a waste of your time and money and emotional energy when you could be working on your startup. How much time and energy have you put into this already? That's a sunk cost - it's gone, not matter what you do, but I wouldn't do a minute more. Tell the lawyers you've decided not to bother and get back to work. I'm sure you have a solid case, and that every fiber of your being is crying out for justice. Y…

Our startup was dependent upon their data feeds and they're the sole provider. There's nothing to get back to work to.

This startup has been my baby for 9 months and has been a roller coaster... blood, sweat, and tears. We're two weeks away from launching and we get stonewalled.

It's either give up completely or fight.

Re: Ask HN: My startup is suing a company and I need help

#8

Post by ianpurton » Wed, Oct 19, 2011, 3:44 PM UTC

gyardley wrote: post #5

Good lord, what a waste of your time and money and emotional energy when you could be working on your startup. How much time and energy have you put into this already? That's a sunk cost - it's gone, not matter what you do, but I wouldn't do a minute more. Tell the lawyers you've decided not to bother and get back to work. I'm sure you have a solid case, and that every fiber of your being is crying out for justice. Y…

"Tell the lawyers you've decided not to bother and get back to work."

Probably the best legal advice you're going to get.

Re: Ask HN: My startup is suing a company and I need help

#9

Post by ianpurton » Wed, Oct 19, 2011, 3:47 PM UTC

throwaway1028 wrote: post #7

gyardley wrote: post #5

Good lord, what a waste of your time and money and emotional energy when you could be working on your startup. How much time and energy have you put into this already? That's a sunk cost - it's gone, not matter what you do, but I wouldn't do a minute more. Tell the lawyers you've decided not to bother and get back to work. I'm sure you have a solid case, and that every fiber of your being is crying out for justice. Y…

Our startup was dependent upon their data feeds and they're the sole provider. There's nothing to get back to work to. This startup has been my baby for 9 months and has been a roller coaster... blood, sweat, and tears. We're two weeks away from launching and we get stonewalled. It's either give up completely or fight.

What kind of data ?

Re: Ask HN: My startup is suing a company and I need help

#10

Post by throwaway1028 » Wed, Oct 19, 2011, 3:51 PM UTC

ianpurton wrote: post #9

throwaway1028 wrote: post #7

Earlier quoted context omitted.

Our startup was dependent upon their data feeds and they're the sole provider. There's nothing to get back to work to. This startup has been my baby for 9 months and has been a roller coaster... blood, sweat, and tears. We're two weeks away from launching and we get stonewalled. It's either give up completely or fight.

What kind of data ?

Pricing