
Mob Wars, the million-dollar-a-month independent Facebook app, may legally belong to SGN - comatose_kid
http://venturebeat.com/2008/08/26/mob-wars-the-million-dollar-a-month-independent-facebook-app-may-legally-belong-to-sgn/
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jtj
Something similar happened.

I initiated, built and launched this application over a weekend. I evangelized
it within the company (so that I get time and resources) and grew this
application on facebook to a strong user base ~.5 M in 2 months. The company
even changed track from their original business.

The founders refused to spare even ~half percent stake in the company. I quit.
David Maestri did otherwise.

The application got acquired for couple of million dollars. And I made $1000.
The size of deal was definitely because of the strong founding team. But I am
confident I would have driven it to a self sustaining business or sell it for
may be a million or close.

The company definitely deserves a lump sum. I used their resources. But I was
the one who really bet big and convinced everyone when people actually opposed
on time being spent on a facebook application. I largely contributed to the
vision - which they eventually are getting to. All I expected was some
gratification for myself.

How does one deal with such a situation?

~~~
ryanwaggoner
You do what you did: you quit.

You will never get rich working for someone else. You may make a few million
over the course of years, but without ownership, you'll never build true
wealth.

Chalk it up to learning, start your own thing, don't look back. Or come and
work for me ;-)

~~~
jtj
:) Thanks Ryan.

I never regretted that decision of mine. I believe the dots will connect going
forward. If things go well I should be bootstrapping my firm by Oct-Nov.

But this incident disturbed the faith in me about work, people and trust. It
has been hard to get over it completely.

~~~
mrtron
I sometimes get very angry at people that have screwed me over. You don't need
to get over it completely - learn from the lessons.

But don't let it negatively impact your future decisions, the best revenge is
living well.

~~~
SwellJoe
I concur. Holding a grudge hurts no one but yourself. Anger damages the angry
person far more than the target of the anger. It merely distracts you from
your goals.

------
ryanwaggoner
That completely sucks. I can't believe that some company thinks they're
entitled to what a developer built in his spare time, using no company
resources (assuming that's the case, of course). Fuck being owned by some
piece of shit corporate machine.

I feel like I read somewhere that these types of agreements are usually not
enforceable in California, but Freewebs looks like they're headquartered in
Maryland (though SGN is in CA), so it might depend on where he was working
when this occurred. Regardless, it sounds like bullshit. Hope he fights and
wins.

~~~
snorkel
I predict SGN doesn't want the application but is instead looking for an out
of court settlement to grab a piece of the pie.

~~~
ryanwaggoner
It comes down to petty greed. But it's even worse than greed. It's unbridled
greed with no integrity whatsoever. Why build something solid that adds value
when you can steal it from someone else who toiled and risked to do so?

------
samson
"The tragic part for Maestri, at least is that if he’d just waited until he’d
left Freewebs to begin development, his former employer would have a far
harder time making the charges stick."

So legally, the advice that I've heard (even here at hacker news) of keeping
your day job, and work on your project on the side is usually wrong. And even
more so if you work at a tech company already.

~~~
nickb
That's a great question!

It depends on your employment contract and the law in your state/country. It
also depends greatly on the area your startup's in and whether your startup is
even remotely similar to what your employer is doing and whether you might
become their competition down the line.

A chance of getting entangled in a lawsuit increases exponentially if you're
going to take on your employer. Also, most emp contracts usually also state
that you cannot contact your employer's customers or people you met through
the company's business engagements for at least a year and usually more. Also,
don't try to poach current employees or you'll get sued. Never use employer's
computers or any other equipment that belongs to them for working on your
startup (that includes take-home laptop that they might have given you). Don't
even use their Word or Outlook for your own stuff. Delineate your startup as
much as possible and don't share your ideas/prototypes with anyone at work
since they might testify against you when called in front of a judge.

I know of one entrepreneur who got sued by a former employer and the argument
they used was that even though he quit before he started the company, the IDEA
was conceived while he was working for them and that he could not have come up
with the idea had he not worked for them. Needless to say, the charge was
ludicrous but it diverted his focus off startup and it also scared some
investors and the startup was stillborn.

PS: IANAL but I know a lot about law and have been advised by many lawyers so
take my advice with a grain of salt.

------
keefe
I think the legality of this depends on the exact details of the contract he
signed. If they are a gaming shop and he releases a game, they may have some
kind of a claim here. A few months ago I decided I wanted to complete a web
research application I had started back in graduate school (and continued
after that). This is a completely different area than my company's, but I
still had to go through a long series of discussions maintaining this job (for
paying the rent while finishing...) and working on this in my spare time. This
lead me to my currently insane 70-80 hour weeks which will maintain for uhm...
more months than I'd like.

As I understand it, if you do not use any of the company's trade secrets or
intellectual property and you develop on your own time with zero company
resources, you should be OK. By releasing this game under an alias and in what
appears to be a related area, it seems like this guy actually may have been
violating some kind of a contract.

I think the moral of the story is, document everything you do as outside of
work hours and if you can pull it off, get your company to send you an email
stating they know about your work and know it is not related.

~~~
cstejerean
Depends on the employment contract. Some companies specifically state that
they own any idea you have while working for them. Be especially careful with
working for large companies that seem to have a product in any market you can
think of, and are planning to enter the others.

~~~
keefe
The applicable statute:

2870\. (a) Any provision in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the
employer's equipment, supplies, facilities, or trade secret information except
for those inventions that either:

    
    
       1. Relate at the time of conception or reduction to practice of the invention to the employer's business, or actual or demonstrably anticipated research or development of the employer; or
    
       2. Result from any work performed by the employee for the employer. 
    

(b) To the extent a provision in an employment agreement purports to require
an employee to assign an invention otherwise excluded from being required to
be assigned under subdivision (a), the provision is against the public policy
of this state and is unenforceable.

------
startingup
Let's also consider an employer's perspective here. OK, you are a Y Combinator
start-up, and you have hired your 18th employee (there are at least 10 that
have 20+ employees, I think). If that employee were doing something like this
on the side, would that sit well with you? How would you draw the line?

Forget the ownership aspects of whatever the employee is creating on the side.
Would you be happy as his/her manager to realize his/her mental efforts are
going somewhere else?

Think hard before you answer.

~~~
mariorz
I would draw the line whenever he stops doing his job right. No difference
from someone who watches TV on his free time.

------
iamdave
_Almost any tech company makes its employees sign agreements guaranteeing the
company the rights to any intellectual property they produce while employed._

That sort of nonsense should be outlawed. It runs COMPLETELY against the grain
of free enterprise, as a person who works and toils over a product has to
suffer losses when their employer wants to take their property, claim it as
business owned and grab the difference? BULLSHIT

~~~
drusenko
I certainly don't know what happened in this situation, but there are also
quite a few scenarios where the company may be justified.

Would it be fair to companies if any employee could create anything they
wanted to, on company time, and screw the company over? Would it be fair to
the company if the employee could use all of the trade secrets and intimate
knowledge of the company's product to build a competitor on his/her own time,
and screw the company over?

It's obviously not a completely black and white situation.

------
vaksel
thats why I'm a proponent of doing your startup full time, it eliminates this
type of BS.

~~~
pluviosilla
You created the initial version of this game in a weekend, but I assume a lot
of development has been done since then. How much venture capital would have
been required to create the final version of this game?
(pluviosilla@gmail.com)

