

Ask HN: Who owns the idea? - throwaway5

Hi Guys,<p>I've been working on a project with two others for the past 6 months. At the beginning, we (stupidly) agreed to equal equity, rather than letting everyone earn it.<p>The relationship has now broken down, due to disparities in levels of commitment. I want to take the idea (I came up with it &#38; designed the system to implement it) and build another team. Out of the three of us, I'm the only one with the knowledge base required to make this business happen.<p>We are not incorporated. I am not wondering who owns the code. I'm comfortable getting it re-written. Please assume neither of them will build competing companies.<p>So, who owns the idea? Can I start a similar company?<p>I plan to consult a lawyer but I just want to gauge the HN community's thoughts on this.<p>In advance, thanks for your time!
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wccrawford
Nobody owns the idea. If I knew what idea you were talking about, I could go
make a new company based on that idea -right now-.

Copyrights are for art, and patents are for inventions. Neither of those cover
'ideas'.

You didn't sign a contract stating that you wouldn't take any business secrets
away from the company, either, I assume, since you say you aren't even
incorporated.

Walk away now, start coding for the new company, and don't look back.

I am not a lawyer and this is not legal advice.

~~~
rumpelstiltskin
Based on this, the Winklevoss twins should have lost their lawsuit against
Zuckerburg no?

~~~
brandnewlow
IIRC they didn't win it, it was settled out of court. If you believe the
standard line, it was settled to avoid the random chance that a civil jury
would decide based on emotion rather than merit.

~~~
rumpelstiltskin
_avoid the random chance that a civil jury would decide based on emotion
rather than merit_

That's precisely my point. In theory, crawford is right in claiming that
'nobody owns an idea'. But in practice, the OP should protect his ass.

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SHOwnsYou
If you wrote the code and have nothing documenting who owns the IP rights,
then you're likely in the clear (though still consult a lawyer).

But the larger issue is to not dick over your friends or associates. I can't
stress this enough. The law may be on your side, but really that is only a
small amount of the total equation. I don't believe in karma (except here -
upvote the shit out of me), but it will just be easier in the long run to be
nice and friendly about it, even if you never see them again.

See what they think. Tell them your concerns and you're thinking about jumping
ship and getting a new team together to execute the idea. If they aren't that
committed to the idea in the first place, they may likely accept it and move
on. Otherwise maybe you could offer them a buyout as a gesture of good faith.

I do want to make it abundantly clear that I am _not_ from the please
everybody at any cost mindset. It is just important to not dick people over
when you can likely easily avoid it with words.

~~~
throwaway5
Yeah, that's good advice.

The trouble I'm finding is that they're not willing to put in the hours due to
work commitments but at the same time, they see the promise of what we're
doing.

I'll talk to them and explain my issues.

~~~
brudgers
Since everyone sees the value and you are unincorporated, an alternative to
breakup might be to incorporate with renegotiated equity and vesting.

The first step is simply explaining that the current situation isn't working
for you and figuring out what everyone thinks is fair.

Breakup may still be the end result, but the less bitter it is for each of
you, the better it is for everyone.

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earle
Since you don't have any documentation or agreements between parties, you can
also most certainly expect a lawsuit addressing all of this under the event
you become successful with your efforts.

I would therefore consult with an attorney, and see what the ramifications
truly are, and what long term items you must now consider in the event your
idea becomes successful.

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DirtyAndy
Are you sure the relationship has broken down. Have you talked about it with
them or are you just pissed at them because you are working 16 hour days and
they are working 6? Before I spent a penny on a lawyer I'd spend some money on
a six pack of beers, sit down with them and make sure you really are no longer
a team (especially as you mention in one reply a partner being a friend?).

So then assuming it is all over, next thing to do is to question why. There is
a lot on HN about how amazing multiple founders are (personally I'm more a ME
kind of guy). The other two don't want a piece of this action anymore, why?
I've met very few people who are lazy and lack commitment when the rewards at
the other end are worthwhile - does 2 out of 3 of your team think the idea is
going nowhere. If so take a deep breath and think about it (I am not saying
they are right, but take a deep breath anyway).

Are you at a point where you all hate each other? If not why not just say I
assume you guys want out, you are not working towards the goal etc, I want to
continue. I am not a lawyer and have little legal knowledge, but if you and
your business partners agree that they don't want to continue with the
business as it stands, and they are happy for you to continue by yourself, and
they sign a simple document you all agree on (doesn't have to be a non-
compete, just that they agree), then in 5 years time when you are the next
Facebook they aren't going to get far - and you'll be able to afford the
lawyers to protect yourself.

On what I assume is currently a zero revenue startup, where you are about to
lose a large amount of 6 months of work and start again, communicate with your
partners for free before you spend any money on lawyers. If they do not say
what you want to hear, then go and talk to a lawyer (a decent one).

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javery
Wait, so are you a non-technical co-founder who had an idea, hasn't written
any code, and now is annoyed that the developers who are working for equity
aren't moving fast enough?

Before you jump to another set of developers, maybe you should figure out why
these developers aren't as interested as you think they should be. Perhaps you
need to offer to pay them instead of just paying them with equity, you could
then buy back some of the equity you gave up.

I don't feel like we have the entire story here.

~~~
throwaway5
The developer was a friend of mine. The agreement was that we pay him and also
provide him with equity.

I know the difficulties that can arise if you don't pay.

Please do not paint me with the brush of the prototypical non-tech with an
idea. I have a strong knowledge base in the area we're working in. This
project could not move forward without my knowledge base.

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webwright
If I were in your shoes, I'd either get them to sign an agreement giving up
all claims to the business/idea or I'd go find another idea to chase.
Alternatively, you could sign a an agreement that says you EACH have full
rights to pursue the business and don't have claims on each others efforts
(i.e. effectively open-sourcing the groundwork you've laid to date).

That is, unless you are convinced that they wouldn't/couldn't sue you if you
built a business worth suing.

~~~
arethuza
That's a pretty sensible idea - but it is hardly "open sourcing" the existing
code, just giving each person an agreed right to use the code.

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ronp
I'm an attorney, so I have to recommend consulting with an attorney licensed
to practice law where you live. Talk to her/him about drafting a simple no-
compete & non-disclosure with the other two partners assigning you exclusive
rights to move forward. Give them some money or other valuable consideration
to make the contract binding. I would not recommend just doing nothing in the
hopes that nothing bad happens; if you are wildly successful you can bet there
will be repercussions.

~~~
etm117
I am not a lawyer, but I think this idea sounds the most reasonable. As a side
effort in case they do not like the proposal as drafted, you could maybe give
them 2% (or some other number) of equity in any new entity you create to run
with the idea with them giving up all rights at that point. It is a small
amount of equity in the "new" business and the signed contract prevents them
from coming back years from now and asking each for their 33%.

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bond
Tell them you'll create your own company and if they wish they can continue
with the project themselves.

Since their level of commitment is not high, you have a very high chance of
succeeding even if they retain the code...

It's all about the execution...

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bdfh42
If you wrote the code and did not explicitly sign the copyright in that code
over to the group - then you own it. If someone else wrote the code then
(assuming the above) they own it.

The "idea" is all about execution - as is often said here at HN - ideas are
ten a penny - it is getting something done that counts.

~~~
throwaway5
I didn't write the code & the copyright hasn't been explicitly signed over.
So, yeah, they own it.

What if I get new code written?

I designed the system that the code implemented. Does that count for anything?

~~~
arethuza
I don't know where you are, but I've been involved in fairly serious
litigation on that very point in the UK and the legal opinion was that unless
the person claiming ownership of the code was literally dictating everything
that was typed in then they don't own the copyright.

~~~
bdfh42
I worked for many years as a freelance developer in the UK market. I own all
my code - it is only licensed to the end user who paid for my time developing
applications to their specification (if any such formal thing existed which
was rare enough).

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Udo
There are two levels to consider. First, and I mean no disrespect, your idea
is not unique. It's not worth anything on its own, without execution. Other
people probably had, have, and will have the very same idea. The only special
thing about it _could_ be the timing. So if you think the timing is right, the
idea is good, and you can execute well: by all means go and do it!

Secondly, yes, there will be backlash. People will accuse you of things. You
say it was your idea, but you'll be surprised how selective everybody's
perception is. To minimize both fuzz and sabotage, you need to make a clean
cut. It needs to be a surprise, and there must not be any transition period.
Whatever code and other stuff you created at your old company, do not take it
with you. Do not tell anyone details about your plans. If you shared financial
commitments, you should compensate those people now, before they have a chance
to complain. Do a clean shutdown. Be guarded but truthful.

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cvg
Grellas' Startup Law 101 is a great starting resource for these sorts of
questions. The IP article is here:

<http://www.grellas.com/faq_business_startup_015a.html>

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rdj
"I'm the only one with the knowledge base required to make this business
happen".

If the above quote is true, why did you let the other two become equal
partners? Seems like there was a mismatch to begin with, assuming this isn't a
detail you just now realized.

Have you tried talking to them? Maybe just getting it out in the open would
fix some things. They may even be relieved and just want to walk away, at
which point you can have them sign over all rights to the project, etc.

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jacquesm
Just do it, tell them explicitly they can do the same if they want to for
symmetry.

After all, they can :)

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bherms
I can't remember entirely, but I'm pretty sure the idea itself isn't worth
much. The value is in the method of execution or plan of execution. Just
because I say we should build a social network for narcoleptic ex circus
clowns doesn't mean I know "own" the idea (I couldn't patent it or anything).
However, if I sat down and wrote out a plan of how to build it, that would be
"ownable". Also, since you didn't sign a noncompete or incorporate or
anything, you aren't legally tied to anything.

(ps, I'm just summarizing what I remember from some of my entrepreneurship
classes)

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siculars
Take a few hours and go watch The Social Network and see what one possible
outcome could look like. That said, go talk to a lawyer, get your ex-partners
to sign something that either gives all of you the right to run with the idea
with no claims on each others implementations.

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SteveMorin
It's basically a you build it you own it world. But at this point I do agree
with webwright. It's much better if you all agree that you can pursue the idea
and all give up right to each others pursuits of this matter.

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jules
I don't think you can own an idea, unless you patented it.

