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Rewriting a Software Product After Quitting a Job?

kdawson posted more than 5 years ago | from the clean-room-white-coats dept.

Patents 604

hi_caramba_2008 writes "We are a bunch of good friends at a large software company. The product we work on is under-budgeted and over-hyped by the sales drones. The code quality sucks, and management keeps pulling in different direction. Discussing this among ourselves, we talked about leaving the company and rebuilding the code from scratch over a few months. We are not taking any code with us. We are not taking customer lists (we probably will aim at different customers anyway). The code architecture will also be different — hosted vs. stand-alone, different modules and APIs. But at the feature level, we will imitate this product. Can we be sued for IP infringement, theft, or whatever? Are workers allowed to imitate the product they were working on? We know we have to deal with the non-compete clause in our employment contracts, but in our state this clause has been very difficult to enforce. We are more concerned with other IP legal aspects."

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the short answer (5, Insightful)

ILuvRamen (1026668) | more than 5 years ago | (#25896917)

The can absolutely sue you, but they'll lose. If they can't take two blocks of code and say "he stole this" they have nothing. I assume you didn't sign a non-compete agreement though cuz then you'd lose.

Re:the short answer (5, Insightful)

hellion0 (1414989) | more than 5 years ago | (#25897101)

As mentioned in parent, a non-compete will screw you before you even get off the ground, since your very plan for the software could be construed as very direct competition, even if it doesn't share a single character of code with their product.

Assuming you didn't, retain a lawyer anyway. Anyone can be sued for anything in this day and age. The trick is, with the help of the lawyer, you can make sure any suit wouldn't be able to stick in the first place. Even if there's never any legal action, the lawyer will still prove helpful to you.

the short hairs. (5, Insightful)

Ostracus (1354233) | more than 5 years ago | (#25897309)

"Anyone can be sued for anything in this day and age."

I'm going to sue hellion0 for not translating his post into Chinese. Think it will get dismissed before we even hit the door? How about any lawyer laughing you out of his office?

Re:the short hairs. (4, Informative)

sumdumass (711423) | more than 5 years ago | (#25897393)

I know people who have lost outrageous suits because they failed to show up in court. I'm sure these suits would have been tossed out had they showed up because two of the people (5 where sued) had their lawyers who had it tossed in no time. 2 of the remaining 3 got lawyers and had their judgment overturned on appeals citing something about not being served notice properly and the last one doesn't want to spend the money because he got busted for some felony and will spend most of his life in prison.

In some areas, you have to show more then in others and the lawyers know what the minimum is and sometimes refuse to file (it makes them look bad). But once the case is filed, it doesn't disappear until some action is taken on it. The judge can't or doesn't throw something out without a request. IF no one requests it to be tossed out, then he can rule that there was no standing or whatever.

Re:the short hairs. (5, Insightful)

davester666 (731373) | more than 5 years ago | (#25897571)

And in this specific case, it can easily come down to just getting sued into bankrupcy. The people may not lose in court on merit, but only because they ran out of money to pay for a lawyer to represent them in and out of court. And this type of case (in general, as it depends on specifics really), it's unlikely that a lawyer would be willing to go into the case on commission, as you only get money if the judge penalizes the other side or awards costs (and depending on your jurisdiction, 'costs' may not match what you actually pay your lawyer).

Re:the short hairs. (5, Funny)

antifoidulus (807088) | more than 5 years ago | (#25897427)

Since Slashdot doesn't support Non-Latin characters, translating into Chinese in slashdot is easy!

????????????

See, that wasn't so hard!

And slashdot gets mad when I use a lot of "junk" characters, so I will go on and say that this isn't 1994, pretty much every single OS/Programming language/browsers supports lots of characters(ok, so maybe Windows doesn't, but that hardly qualifies as an OS.) Why doesn't slashdot?

So after 3 times of trying to submit, I will type a little more. The whole firehose view on the mainpage sucks. My guess is that I am going to hit submit a 4th time and the lameness filter will still abort my post. Malda must be pro-choice.

On the 5th attempt, I must pare down my joke.

On the 6th attempt, it hardly becomes a joke anymore because the lameness filter is insane.
On the 7th attempt, I'm about to give up.....
On the 8th attempt I think I will submit a bug report. The post was supposed to be a bunch of ? marks because that is what slashdot translates non-latin characters into(though some have found workarounds)....but the lameness filter destroyed my attempt at criticism of the site...maybe thats its purpose?

Re:the short hairs. (0)

Anonymous Coward | more than 5 years ago | (#25897599)

You need therapy.

The shortest hairs... (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#25897623)

are on this guy's butt, said the goat!

  http://www.goatse.cx

Re:the short hairs. (1)

monkeySauce (562927) | more than 5 years ago | (#25897559)

Think it will get dismissed before we even hit the door? How about any lawyer laughing you out of his office?

Wanna bet? Amongst the good ones, there are plenty of dumb/greedy/starving lawyers that will take almost any ridiculous case. Hopefully an absurd case will get dismissed by a competent judge, but you can't count on it, especially when talking technology since the really techno-literate judges are few and far between. Plenty of judges have been hoodwinked on technical matters they clearly failed to grasp.

Re:the short answer (4, Insightful)

TapeCutter (624760) | more than 5 years ago | (#25897529)

"a non-compete will screw you before you even get off the ground"

Maybe but the "short answer" also applies to non-compete's.

The submitter has indicated that he signed a non-compete clause but knows they are difficult to enforce in his state. IANAL but here in Australia non-compete clauses are SOP despite the fact they are considered a restriction of trade under common law and are totally unenforceable. The only people who pay any attention to them are the ignorant and the agents (same thing in many cases). Agents respect non-competes because the employer is their customer and they don't want to piss off potential/actual customers by encouraging contractors/employees to "break their contract".

AFAIK the US also inherited English common law but now has ~50 different forks.

You need a lawyer, this i not just about copyright (2, Informative)

Anonymous Coward | more than 5 years ago | (#25897425)

In some cases, if the company can demonstrate that you obtained the knowledge to write your new system while working for them, they may have a claim.

There are more things to consider than copyright law.

IANAL

Re:the short answer (0)

Anonymous Coward | more than 5 years ago | (#25897471)

non competitive agreements are for a point of time (6 months-1 year). after that, you can release the thing you do.

Re:the short answer (1, Insightful)

Anonymous Coward | more than 5 years ago | (#25897515)

If they can't take two blocks of code and say "he stole this"

Would you bet that neither you yourself nor one of your "friends" (more like business partners) will write code that is remarkably similar to code that was written under employment? It doesn't even have to be intentional.

If you're going to cost your ex-employer serious money, you will be sued. Even if there is nothing to make the allegations stick, you will have to defend your new business in court. Do you have the funds and nerves to do that? A business is much more than a good product.

Re:the short answer (1)

pilsner.urquell (734632) | more than 5 years ago | (#25897607)

Start with reverse engineering [wikipedia.org] and the IBM Compatible PC [wikipedia.org] . This has been going on for a long time and is defiantly possible with the right precautions for example if you only have the binary file(s) a clean room [wikipedia.org] approach would probably be used. I believe it is doable but at the very least you will probably need a lawyer.

Get a lawyer. (4, Insightful)

PoprocksCk (756380) | more than 5 years ago | (#25896919)

Subject.

Mod parent up. (3, Funny)

ari_j (90255) | more than 5 years ago | (#25897021)

Subject - and get a lawyer.

Obligatory Meme (5, Funny)

devloop (983641) | more than 5 years ago | (#25897055)

1 - Copy your ex employer product
2 - Get sued into bankruptcy
3 - ????
4 - Profit ???

Re:Get a lawyer. (3, Insightful)

who knows my name (1247824) | more than 5 years ago | (#25897083)

IANAL, which is why you shouldn't ask legal questions on /.

Re:Get a lawyer. (5, Funny)

Anonymous Coward | more than 5 years ago | (#25897175)

Why get a lawyer when you can get unbiased and reliable advice here on /.?

Re:Get a lawyer. (0)

Anonymous Coward | more than 5 years ago | (#25897189)

Because it's biased and unreliable as your post quite elegantly demonstrates :)

Re:Get a lawyer. (1)

dontmakemethink (1186169) | more than 5 years ago | (#25897527)

If you need a lawyer before you do something, you'll need six after. Unless it's a fight worth fighting, move along.

Tread carefully (4, Informative)

zarthrag (650912) | more than 5 years ago | (#25896937)

Even if it were safe, I'd expect there would be a lawsuit no matter what. I'm sure there's a ton of other programmers out there who have similar thoughts. As companies grow older, they seem to become more and more stymied by a PHB than driven intellectually by those who first made it's growth possible. Just make sure your starting group retains some council - and be sure to file as an LLC, also.

Re:Tread carefully (1, Interesting)

AeiwiMaster (20560) | more than 5 years ago | (#25897141)

As companies grow older, they seem to become more and more stymied by a PHB than driven intellectually by those who first made it's growth possible.

How Software Companies Die
http://crowdnews.eu/stories/view/38/ [crowdnews.eu]

Re:Tread carefully (5, Informative)

ORBAT (1050226) | more than 5 years ago | (#25897581)

Or how about just linking to the article (here [zoion.com] ) instead of making us jump through hoops?

Why make your lives difficult? (3, Insightful)

bradley13 (1118935) | more than 5 years ago | (#25896953)

Why not come up with a fresh idea? Spend your time coding instead of in court.

Re:Why make your lives difficult? (4, Interesting)

PinkyDead (862370) | more than 5 years ago | (#25897247)

Or do something related, that (initially) supports the existing product, making it faster or better? This will allow you to exploit the knowledge you already have and use your current employer as a reference/sales source.

Most start-ups I've ever worked for spawned from another (bloated) company in a symbiotic, but evolved to outstrip them.

(And you and I both know that on your computer somewhere are a load of tools that only you know about which could easily be suborned to your needs.)

Re:Why make your lives difficult? (5, Funny)

dilvish_the_damned (167205) | more than 5 years ago | (#25897265)

Why not come up with a fresh idea? Spend your time coding instead of in court.

That will never do. Its completely incompatible with the legacy angst and frustration layers they have spent so much time developing.

Re:Why make your lives difficult? (0)

Anonymous Coward | more than 5 years ago | (#25897363)

Why not come up with a fresh idea? Spend your time coding instead of in court.

Always remember you're unique - just like everyone else. It might make your life easy rather than being tough and difficult !

www.iwebforums.org

Re:Why make your lives difficult? (1)

Per Abrahamsen (1397) | more than 5 years ago | (#25897617)

Why not come up with a fresh idea?

They already know about this application domain, it can be a huge asset to just throw away. The actual coding is often a minor part of program development.

Contrary to popular opinion... (5, Insightful)

bigmouth_strikes (224629) | more than 5 years ago | (#25896979)

...but the hardest and most important part of running a software product company is selling the product. Your new, better designed, better documented, better implemented product has to compete with the same feature set - you said it yourself - with a more established product. What advantages will your product give the customer, making it easier to sell and possibly making the customers switch ?

As for the legal issues, IANAL.

Re:Contrary to popular opinion... (5, Insightful)

IamTheRealMike (537420) | more than 5 years ago | (#25897137)

Zing, that's correct. The real question these guys should be asking themselves: are we really sure that management and the "sales drones" are fundamentally incompetent, and that we are fundamentally better? What makes them think that 10 years down the road their company would be any different? Perhaps selling a product to lots of different customers is just hard and hosted vs standalone is not, ultimately, such a big deal?

They should definitely read The Development Abstraction Layer [joelonsoftware.com] before moving this beyond just talk.

Re:Contrary to popular opinion... (0)

Anonymous Coward | more than 5 years ago | (#25897405)

What business would trust these programmers with their ideas in the future? If they take ideas and compete when they're not treated well then be aware that the rumour could spread and you might not find work in the future.

Re:Contrary to popular opinion... (5, Funny)

mr_gorkajuice (1347383) | more than 5 years ago | (#25897521)

... and is it really healthy for a bunch of coders to start on their own, when they think the big issue is the quality of the code?

Overhyped by sales drones? Well, even if you don't, at least your colleagues believe in your product.

Re:Contrary to popular opinion... (4, Insightful)

mgblst (80109) | more than 5 years ago | (#25897187)

You are also working against an established company, with possibly great support. This can be a big killer for you. Business isn't all about code.

Re:Contrary to popular opinion... (3, Interesting)

Firehed (942385) | more than 5 years ago | (#25897633)

In fact having worked in software sales, I'd say that support is probably the determining factor in most sales unless you have a very specialized product. And if that's the case, you're going to need to outstrip your employer's old code by miles since they're the established player in the vertical.

As a developer, you may know that the code sucks. That it just somehow compiles. That it really should be subjected to a rewrite from scratch. That "WTF?!" is present in five more comments than is healthy. And you're probably correct. However, when it comes to actually making money from it, you just need to be better than your competition.

I've fought with coders and with salespeople at the same company, often times over the same issue (it's a hazard of being a sales engineer - you often end up as a moderator). Neither would exist without the other, so stop blaming each other and realize that both of your problems are management's fault :)

Not only am INAL, but I'm in a similar position as the original poster. I'm partly thinking that since I have personal projects that could benefit from the software, I'll keep it to myself until any non-compete expires (even if it's not enforceable) just to stay on the safe side. Which means that development is well underway, for me. It may never make it into the public. It may go out commercially. It may go out as open-source, with some sort of hosting(SAAS)/support-driven business model - right now, the most likely. But until you know that there's no valid case should your ex-employer sue you, I'd keep it as a personal project.

Re:Contrary to popular opinion... (1)

IAR80 (598046) | more than 5 years ago | (#25897315)

better implemented product has to compete with the same feature set - you said it yourself - with a more established product.

Assuming they will be able to deliver anything, which they had a hard time anyway, after a mass defection. Good luck guys.

Re:Contrary to popular opinion... (0)

Anonymous Coward | more than 5 years ago | (#25897569)

Agree. Imitating an existing product is:
1. flattering the product. People may actually think the original is better (hence the imitation).
2. not giving you any business edge. Without a portfolio, why will clients swing your way, when the incumbent looks safer?

Legally (though I am not qualified to make these comments), I think it's about positioning and imaging. You may get sued for misrepresentation if you built a Word clone. But you're better off building a 'rich text editor that supports Word documents'.

Slashdot ? (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#25896985)

What the Dawkins has happened to the front page? I hope this is an error, and not the future.

Re:Slashdot ? (1)

Randle_Revar (229304) | more than 5 years ago | (#25897051)

It is the future if we do not yell loud enough.

I must say I have some very mixed feeling about your use of Dawkins.

Re:Slashdot ? (2, Informative)

Randle_Revar (229304) | more than 5 years ago | (#25897091)

Also, following this link [1] will fix the front page, but not the user page. Credit to AKAImBatman

[1] http://slashdot.org/index.pl?usebeta=0 [slashdot.org]

Re:Slashdot ? (1)

Uber Banker (655221) | more than 5 years ago | (#25897343)

Ugly mess with no information to let me know whether I actually want to click through to a story. As stated above, go to User Preferences and de-select 'Use Beta Index'.

New features are nice, but not when imposed instead of being made available to choose. In particular I saw no message or story about this - perhaps it'd be nice to put something at the top of the page.

I may get modded down, I only intend these as suggestions to help us user Slashdot in the great way we're used to.

Re:Slashdot ? (1)

ArsenneLupin (766289) | more than 5 years ago | (#25897445)

Log in you coward, and then it will revert back to normal!

Short answer: (4, Insightful)

ZorbaTHut (126196) | more than 5 years ago | (#25897011)

Get a lawyer.

Long answer:

If you signed any sort of NDA, you might be liable for any information you gained while on the job (for example, architecture, business logic, algorithms.) If you didn't, you still might (theft of intellectual property.) I imagine you'd be quite safe if you could somehow prove that you had never inspected the code in any way. Since I'm guessing at least one of you was a programmer, I imagine you can't prove this. I, personally, would find the whole thing dubious and recommend avoiding it, but if you want to try anyway - get a lawyer.

Re:Short answer: (1)

MathFox (686808) | more than 5 years ago | (#25897135)

Most job contracts contain some form of an NDA and a non-compete clause. Both may apply when you start making "better widgets" than your former employer. Review the contract you signed when you got your job, preferably with a lawyer.

Starting a new company is easy, the hard part is getting the revenue to keep it going. A lawsuit will cost you time and money and is a great distraction from doing business. Even if you win the lawsuit, the company may go under due to the legal costs. I would recommend making "something completely different" to avoid a lot of problems with (soon) former employers.

Re:Short answer: (5, Informative)

rachit (163465) | more than 5 years ago | (#25897179)

You could save the money on a lawyer.

You'll likely get sued regardless of whether they have a case or not. If you have the money to fight it, it will drag on for some time.

If you ever need to raise money, no VC will invest in your company if they know you have a potential legal liability.

Depending on the nature of the software (more likely to happen if its expensive / low volume), your previous company may try to harass your customers too.

It sucks, but its the nature of the game. Unless the current company that you work for isn't willing to do anything quasi-legal to preserve their business.

Re:Short answer: (1)

eggnoglatte (1047660) | more than 5 years ago | (#25897201)

That is exactly right. If any of the guys had access to code/algorithms that the old company considers trade secrets, then they are in a world of pain if they replicate that.

If it comes to a lawsuit, their old employer will most likely subpoena them to provide their new code to an independent expert for code comparison. Again, any hint of copying even small pieces (or recoding algorithms considered trade secrets from memory), and they are done for.

If they absolutely must stay in the same area they already work in, then they should hire some outside person, who performs a cleanroom reverse-engineering of the original product. Make sure you clearly document that there were no leaks of inside knowledge (keep lab notebooks etc.).

Re:Short answer: (0)

Anonymous Coward | more than 5 years ago | (#25897223)

I actually think it gets worse than what you said.

In some places your mere thoughts while on salary belong to the company. So the architecture that you think of now while being paid for your employer may in fact be theirs, not yours.

Get a lawyer.

Re:Short answer: (0)

Anonymous Coward | more than 5 years ago | (#25897467)

Counterbalancing this point is the claim of inherent knowledge. He is not disclosing a companies product to someone else, he is taking nothing but knowledge of the existing product which is built into him and cannot be removed.

I obviously know squat about U.S. law, but this point has some standing in Australia.

My company (initially) started on somewhat similar grounds, except that the original company was closed by it's parent company. As such, the non-compete was very very gray. We made the pledge that at the first sign of trouble, we'd close the business down.
Getting legal is too damned expensive.

Probably no issue. (1)

N3Roaster (888781) | more than 5 years ago | (#25897013)

Presumably you're planning on using a different name, logo, and such for your product. It isn't hard to avoid trademark issues. You've already pointed out that you're not taking code, so that rules out copyright issues. If the old company has been patenting aspects of the project, this could be a potential for legal trouble as having worked on the old project might make it easier to claim willful infringement on any of these. It sounds like your plan is to change things up enough that this probably isn't an issue. There are many examples of people leaving a company and taking the concepts behind their project with them either to work on at another company or to form a startup. That said, these days it seems you can be sued for anything and I am not a lawyer. You may want to consult one before making the jump. If you haven't started a company before, you may want to consult one anyway.

Do what hollywood does.. (0)

Anonymous Coward | more than 5 years ago | (#25897029)

Make your opponent look bad. If it works in a divorce case, surely it gives an IP lawyer some ammo.

If you can somehow get a reason *cough* excuse *cough* for leaving the company such as poor conditions or bad pay negotiations, then surely you're in a better position.

But lawyering-up sounds tops. Did I mention lawyers?

Prevent the lawsuit. (5, Insightful)

rjh (40933) | more than 5 years ago | (#25897049)

First off, don't ask "can I be sued for this?" You can be sued for eating a ham sandwich. The important question is whether you'll face legal action over this, and only secondarily whether you'll prevail. Court process today is so messed up that paying for a lawsuit, in both time and money, is often more ruinous than the final judgment against you.

Being in the legal right does not insulate you from lawsuits. It never has. You should be more concerned with pre-emptively preventing a lawsuit from being filed, not whether you would prevail in court if one were to be filed.

One of the reasons why so many people say "get a lawyer!" is because, believe it or not, lawyers are very good at this sort of thing. Lawyers are excellent business negotiators. Talk to a lawyer, explain what you want to do, explain that you don't want to be sued. The odds are very good the lawyer will be able to get you a way in which you get to do what you want to do without worrying about a lawsuit being filed.

A good lawyer wins lawsuits. A great lawyer prevents lawsuits from being filed in the first place.

Good luck! :)

Re:Prevent the lawsuit. (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#25897143)

A good lawyer wins lawsuits. A great lawyer prevents lawsuits from being filed in the first place.

And a commander-in-chief just pardons people :)

Re:Prevent the lawsuit. (1)

Kjella (173770) | more than 5 years ago | (#25897245)

First off, don't ask "can I be sued for this?" You can be sued for eating a ham sandwich. The important question is whether you'll face legal action over this, and only secondarily whether you'll prevail. Court process today is so messed up that paying for a lawsuit, in both time and money, is often more ruinous than the final judgment against you.

Maybe I've gotten a bad impression of how the legal system works in the US, but I'd say there's way too many reasons for them to file a lawsuit regardless of whether they win or lose. Consider this, they got an existing product with an existing revenue stream. Their development pace will probably take a massive hit from these resignations. How do they buy time to rebound from that? Well suing you so draw money out of your development fund, making your people spend time documenting that you've done nothing wrong. Even though there's no code you should be damn sure noone has done any architectual/design work that can be proven to be on company time, company equipement or anything like that.

You have to be prepared for a worst case where they claim you've not only ripped off all their existing IP, but essentially conspired to not do your work, secretly creating a shadow product where all your solutions and improvements went into, then collectively resigned and suddenly have a superior product within an impossibly short timeframe. Not only would it have to go into your start-ups liability secion which can give you trouble getting funding/loans, but you'll also be trying to make sales against the old company's PR machine. If they were to win, you'd probably be dead and companies are risk adverse, what happens to their support and would they soon have to migrate to another product? Do not underestimate the power of FUD, correctly applied you can't touch them for it but it will hurt you badly.

Re:Prevent the lawsuit. (1)

Esel Theo (575829) | more than 5 years ago | (#25897275)

Yes, you should definitely try to prevent a lawsuit. Lawsuits can take an almost infinite amount of time and cost lots of lots of money. You can easily go bankrupt long before you might eventually win the battle.

It depends. (1)

thona (556334) | more than 5 years ago | (#25897087)

* Do you have an NDA or non-compete clause? In that case - follow it.
* In general, unless the softawre implements patents, you are free to copy it.
* Especially if you can proove that the stuff you DO copy is publicly available. This can include features, UI workflows, even architecture. Proove is easy: demoes, public documentation etc. all proof that you did not use "hidden knowledge". Even thigns that you can deduct (not reverse engineer) from an available demo helps here.

That said, the devil IS in the details, so you should get a lawyer. Some things may be protected and you do not want to get into problems there. But in general, earlier work does not stop you from doing the same later yourself.

Go for it. (5, Funny)

Anonymous Coward | more than 5 years ago | (#25897093)

You probably have nothing to worry about.
It's all cool.

Ask a lawyer... (1)

the1337g33k (1268908) | more than 5 years ago | (#25897095)

You know, it might be in your best interests to just go and ask a copyright attorney about this. They would be able to tell you definitively if you could be sued into oblivion.

Re:Ask a lawyer... (1)

shentino (1139071) | more than 5 years ago | (#25897279)

If the RIAA has taught us anything it's that you can be sued into oblivion no matter what.

Re:Ask a lawyer... (0)

Anonymous Coward | more than 5 years ago | (#25897635)

I saw you! you copied my code! look at all that semicolons! the stile is totally equal, one for each line!

working for ms? (5, Funny)

northkid (1416465) | more than 5 years ago | (#25897109)

Does this mean windows 8 won't suck?

Re:working for ms? (1)

STFS (671004) | more than 5 years ago | (#25897257)

hosted vs. stand-alone

Yeah, I'm sure a hosted Operating System would totally rock!

Re:working for ms? (1)

alpayerturkmen (981639) | more than 5 years ago | (#25897269)

No, it means it will be hosted.

Re:working for ms? (1)

francium de neobie (590783) | more than 5 years ago | (#25897477)

Are you sure you didn't misspell "hosed"?

Advice on /. (4, Funny)

2Bits (167227) | more than 5 years ago | (#25897111)

Can we be sued for IP infringement, theft, or whatever? Are workers allowed to imitate the product they were working on?

Try it, and let us know. And we could discuss the lawsuit later too, I mean, make it a series :)

Let It Go (1)

virtigex (323685) | more than 5 years ago | (#25897113)

You can get sued for anything. Of course, the lawsuit may not be successful, but your new team will be swamped by the cost of defending yourselves. Why don't you think up another idea entirely and not risk getting into needless conflict with your former employer? To the outside, the fact that you put yourself in direct competition with your former employer, makes you out to be a bunch of bitter engineers. All your employer needs to do is to imply IP theft and start a frivolous lawsuit and potential customers will avoid you like the plague.

Unfair competition (1)

alienw (585907) | more than 5 years ago | (#25897117)

Watch out. Definitely talk to a lawyer. It will be very hard to prove that your knowledge of your employer's product didn't make it into the new product. It's not particularly difficult to meet copyright requirements, but there are other aspects. Main issues are going to be common law things like unfair competition, as well as trade secrets. People do this kind of thing all the time, and they also frequently get sued for it. You'll have to consider your particular circumstances, but if this seriously hurts your previous company, they will almost certainly sue you, rightfully or not. So that will have to be part of the plan from the beginning.

You can do IT! (1, Interesting)

fibrewire (1132953) | more than 5 years ago | (#25897139)

well, if the software is worth while and you don't mind releasing it under the GNU GPL then i don't see why you can't. You wouldn't be competing with the project because you wouldn't be making money from the code. You CAN make money by supporting the software, also in California non competes and the like have been ruled "NO GOOD" in this state (search SLASHDOT 3 days ago) and you would have the benefit of IBM's financial backing of legal services if anyone tries to quash your great idea. Just don't make bingo software, i HATE bingo software...

my guesses... (0)

Anonymous Coward | more than 5 years ago | (#25897145)

Leave your existing company and start your new business.

Hire some good programmers and let them do the actual coding under your guidance and to your specifications. Make sure that the coders among you do not write any actual code.

That may work to partially insulate you from claims by your former employer. They will surely come to you if you develop some similar service aimed toward the same clients and are successful enough at your venture to cause your former employer to lose business. Suing you becomes their new business model :)

As above, IANAL however I have stayed at a Holiday Inn... also partied with and got as drunk as a judge while staying there. You'd really not expect a judge to get drunk and table surf, would you?

waaah?!?! (1)

eWarz (610883) | more than 5 years ago | (#25897155)

Funny you ask this now. A very dramatic thing happened at work today and i'm thinking the same thing.

Who cares about code quality? (1)

webreaper (1313213) | more than 5 years ago | (#25897171)

Not the customers, certainly!!!

You say the code quality sucks, but who cares? If the app works, then that's what matters to the customer. Beautiful code is only an advantage to the company selling the product, as it makes maintenance and enhancements easier to manage and develop.

If you bring out essentially the same app, how will you market it? "Our app is just like X, but our code is gorgeous!". Yeah, that'll sell loads.

If you're really bothered about code quality, put together a whitepaper and present it to the management (and shareholders) showing why it matters, how you intend to improve it, what it'll cost to do (time and dollar-value) and what the RoI for the code-quality improvements will be.

If the management can't be convinced, then go and work for another company on another product altogether.

A better way... (1, Interesting)

Anonymous Coward | more than 5 years ago | (#25897193)

There is no chance you are going to get away with this.

Your company will not sit by idle and let you create a directly competing product. There are many kinds of intellectual property which the company owns around your product and which you may find yourself infringing - it is not just the code you are writing. You can be sure that the lawyers will find many different ways of going after you.

Any lawsuit brought against you will be a strain on your startup budget and keep away your prospective customers.

Don't underestimate the 'sales drones'. You will have to sell your software, too, and will quickly find that you will have to act like them. Are you sure that you will be able to do that?

Are you sure that your new version will be commercially viable? Do have a reliable estimate on your development costs and timetable? How can you be sure that you will be profitable (e.g. do you already have a customer who will pay for your development?). With software it is very easy to develop unrealistic business plans that look great on paper, but never even come close to the expected the number of paying customers.

As tech people, we always assume that the most important work that goes into a software product is the code. But that is wrong. The most important work is sales! Whether you like it or not (..I am not a sales guy and I don't like it either, but this is the way it works). Just look at how many horrible products are out there that sell well.

If you think you can do better, then there is another way: Ask your company for their support. It does not sound as if the current product were a cash-cow. So if you can come up with a realistic business plan which has a good rate of return (otherwise you would not be thinking of starting your own version, right?) then propose a joint-venture or buyout. I am sure your company would be delighted to have you work for free instead of having to pay the development team. Give them a minority stake, ask them for seed funding (continue to have them pay your salary for a time...), and then get started.

You just need to be careful in orchestrating this - your immediate superiors may be the biggest roadblocks. Finance guys further up are less emotional. They will calculate this through and if the numbers look good, they will back you.

But ultimately you assume that you know better than they how to make money with the product. So you need to convince them that they have a problem without telling them all your solutions in advance.

Enough of the rambling... good luck!

A friend of mine did this about 10 years ago (5, Interesting)

Chrisq (894406) | more than 5 years ago | (#25897253)

A friend of mine did this about 10 years ago. The original company accused them of theft of sourcecode (which they hadn't done) and made criminal charges as well as suing them. Fortunately one of the new company's founders was a Lay Magistrate. He got the court fatstracked to court and swore under oath that they did not have any source code, which was enough for another judge to throw the case out!

They also brought a civil case for stealing intellectual property, but most of what they included was standard (It was Travel Agent's software), so they put together a brochure of various other solutions and shown that there was nothing that their "old" company had uniquely developed.

The old company then made a big mistake. They wrote to all their clients telling them not to deal with the company my friend and colleagues had set up because their software was "no good" and "ripped off", and that they would not support anyone who even looked at the software. They had 50 enquiries that week, and went from having three large customers (which covered costs and paid a quarter of a years salaries) to 20 in six months (which meant that they were pretty well off)!

PayCycle (-1)

Anonymous Coward | more than 5 years ago | (#25897213)

Look up a company named PayCycle. The founders worked at a much larger payroll company that's now out of business. They worked together, saw how much better it could be, left and created an amazing online payroll service. that is www.paycycle.com

Well of course you can be sued... (1)

3seas (184403) | more than 5 years ago | (#25897255)

It'd make to much sense to allow improvement and competition of the application of software ideas in the proprietary world.
It'd be rather self contradictory of a proprietary software company to not sue.

Did any of you sign no-compete agreements? Clearly you don't have any sort of hope for a clean room development environment.

People sue others all the time and it can be a very resource draining matter to deal with. Consider SCO....

So maybe in the overall picture, either way you go, its not going to be any more worth it.

Seems to me what you are really wanting to do is to have your cake and eat it too.

And then there is the open source world, where there is plenty of cake to eat and have.

Why not assume the worst (1)

cerberusss (660701) | more than 5 years ago | (#25897261)

Why not assume the worst situation?

Write a business plan in which you:
- Have 20K available for a lawsuit (number pulled out of air)
- Have enough reserve to survive the time while you write said product

Also, consulting a lawyer will cost money but it's a good idea because that investment alone will weed out the talkers. Everyone dreams of starting a company some day. So your friends/teammates of course love to talk about it. But will they be there when plans get serious? Or will their spouse have objections? Or maybe there are financial obstacles for them? Asking for $200 for discussion with a lawyer will do a first round of weeding out the not-really-serious people.

Re:Why not assume the worst (2, Insightful)

cerberusss (660701) | more than 5 years ago | (#25897291)

Sorry to reply to self, but this topic got me because of the whole start-your-business stuff.

In the past two years, I've started my own business. I've learned that I can do only one thing at a time: either sales or coding. Not both.

For me it turned out that I'm not bad at sales. I hardly touch code anymore because I just don't have the time; I have to keep the 'pipe' filled with new things. But I'm OK with that.

Question is: are you OK with that as well?

You will be sued. (2, Insightful)

91degrees (207121) | more than 5 years ago | (#25897281)

Can we be sued for IP infringement, theft, or whatever?

Yes. All three. They might not succeed but be prepared for a lengthy legal battle which will cost more than losing.

Are workers allowed to imitate the product they were working on?

Yes. But only in general, there are many exceptions.

We know we have to deal with the non-compete clause in our employment contracts, but in our state this clause has been very difficult to enforce.

You're in a different situation from most other cases. Other cases have most likely been people working on broadly related but ultimately different products. You appear to be planning to directly compete with your previous employer's core product, using knowledge gained whilst working for your previous employer.

Don't ask Slashdot (1)

DF5JT (589002) | more than 5 years ago | (#25897289)

Get a lawyer.

Yes, you can (1)

jeroen94704 (542819) | more than 5 years ago | (#25897319)

> Can we be sued for IP infringement, theft, or > whatever?

Yes. Writing software requires part skill, part domain knowledge. Your employer cannot prevent you from using your skills (e.g. Programming in C++) at another job, but they can prevent you from using the domain knowledge you acquired on the job.

Whether you actually _will_ get in trouble is another matter entirely, of course.

As with all other responses here: IANAL

Good luck! (1)

tchiseen (1315299) | more than 5 years ago | (#25897351)

Check your contracts, there may already be limitations written in regarding work you've done at the company. In a perfect world, if you're not using any IP or specific training/information provided/collected by your employer, you should be able to try and make it on your own and compete against them. Keep in mind knowing your market is one of the most important aspects of success, and market research may also constitute IP. Good luck indie coders!

Consider doing it and STAYING (2)

waferhead (557795) | more than 5 years ago | (#25897355)

Perhaps do up a good demo and sell it as the next version of the product?

Build a buisiness case, and sell it, set it up as a small more or less independant programming group, with clear goals etc.
(And have upper management sign off on it, in writing)

Occasionally even large companies demonstrate signs of harboring intelligent life.

(I realise YMMV seriously)

Re:Consider doing it and STAYING (0)

Anonymous Coward | more than 5 years ago | (#25897407)

Agree, IMO, I would first try to convince them to give me carte-blanche and lead the team - or if they are not willing to take the risk, resign while having sorted out a solid sub-contract with that same company beforehand.


"Employee convinces a handful of co-worker to stab their feeding hand in the back and release the exact same product"
definitely sounds worth a lawsuit..

How to survie in a sue rich environment... (5, Interesting)

halo_2_rocks (805685) | more than 5 years ago | (#25897365)

I have "re-written" a few programs in my time. Here is what you need to do: 1) Plan on being sued. You can't avoid it (the big guys use it to keep you from competing). 2) Work around the system. To sue someone, you actually need someone to serve papers to. This the first thing to attack. Form two S-Corps. One where you transfer all the money (off shore account is a must) and one with all the debts and oh yeah - your public face/address/etc to the world. 3) Use a post office drop box. To be served papers, they have to hand you the documents. Kind of hard to hand them to you if they can't meet you. 4) Having been "served" (which can take them months - talk about some pissed off lawyers). It is time for the next step. Offer them a couple hundred bucks to buzz off (if they have sued you before, they'll take the money - if not, time for a lesson). 5) Don't send anyone to represent the S-Corp in court. Ignore them. 5) They win a default judgement. Yawn. Ignore them. 6) The lawyers involve the county sherrif. He'll serve you notice they are seizing the property (bank accounts, property, etc) held by your debt laden, assetless S-corp (depending on where it is served you have a number of days to vacate etc). Yawn. Great. Give it to them because it is worthless. 7) Form a new S-corp, give load it with debts and your new public face and off you go again. Rinse and repeat as often as necessary. Oh yeah, one more thing - don't forget to pay your S-Corp taxes. IRS can come after your personally for back taxes. But, civil lawsuits can't.

Re:How to survie in a sue rich environment... (3, Informative)

_Shad0w_ (127912) | more than 5 years ago | (#25897391)

Enterprise Liability [wikipedia.org] .

Re:How to survie in a sue rich environment... (3, Informative)

tknd (979052) | more than 5 years ago | (#25897625)

You have to be careful because unless you really understand how the laws work, you can get into trouble for just following advice even from a lawyer. For example there's something known as "piercing the corporate veil" which gets around setting up fictitious corps for the purpose of insulating another entity. In order to do this, one must prove that the corporation in question does not act as a corporation should (have a board, have a corporate account and books, have records of board meetings, etc).

Also keep in mind that lawyers often operate as partnerships so they too are businesses. Their duty as an agent is to of course act in your best interest but as a business they're hired to "win". So of course they might say that you can do such and such but it all depends on how good of a lawyer they are and how well their experience or advice will hold up against the competition's lawyers.

Sure, you should speak to a lawyer but if you really want to play dirty you'd better take a business law class and understand the rules of the game yourself. To do otherwise is just like walking through a gauntlet blind.

This advice is for the OP. You, the parent, may have had experience with this already and know what you're doing to get away with it.

check the patents before - the rest is OK (0)

Anonymous Coward | more than 5 years ago | (#25897389)

You may not use the knowledge you've got in the company.
But if you shall not use the code etc, but you'll offering with your product similar features as other product publicly known (accidentally offered by your former employer), there is no legal obstacle to do this ...

But check carefully that there is nobody having a patent to anything like clik-on-hyperlink or so to prevent that a 3rd persons would take a benefit on you.

And yes, prepare a budget for advocates to protect you from you former employer, who will try to intimidate you. This is the best practise how to get rid off a concurrence: "sue them again and again, until they collapse, because they will not have any more resources to do anything else just to reply to your attacks".

Devils advocate (1)

slashdot.org (321932) | more than 5 years ago | (#25897409)

Seems like a very naive question.

(IANAL etc etc)

- do you _actually_ understand the legal ramifications of your state/country law with regards to work for hire and IP ownership?
- do you _actually_ understand the legal ramifications of any contracts you signed to gain employment?

Unless you are a lawyer, the answer to those questions is most certainly going to be 'no'. Thus the recommendations to 'get a lawyer'.

Playing devils advocate here for a bit, so you are saying that your company has paid you to develop this product. Paid you to think about the possible implementations, architecture, shortcomings, missing features etc etc.

Now you don't quite like the way the company is run, so you want to walk away with a bunch of people and put ideas into practice which you developed (at least in your head) while being employed by this company.

Here's a few questions I would ask you in court, if I was the defense lawyer (and again, not being a lawyer and all, they'd undoubtedly do a much better job):
- exactly during what time did you come up with this better design? Was it during working hours? At least part of it?
- how hard did you try to get this better architecture implemented at the company?
- even more troublesome: how hard did you try to NOT get this better architecture implemented at the company? I.e. did you think of it and never mention it?

The thing is, you are not working on the Cadillac assembly line. You are paid for working with your brain mostly.

This is definitely newer territory, but I'd be surprised if there wasn't enough precedence for a lawyer to give you good advice (and if I had to put money on it, I'd put it on "no freaking way is that a good idea").

Hey, I support the EFF; I don't like all of the craziness around IP, but when someone is paying you to do a job, I don't think it's unreasonable that they have *some* right to what they pay you for.

Here's what I would suggest, if you guys are a bunch of smart developers, why not create a product in a different market? There's so much stuff to be done, it's hard to believe that a bunch of smart people can't come up with a compelling product.

Alternatively, why don't you push for this better architecture inside the company a bit harder? Maybe go to your boss' boss. Yeah, that's not easy. Guess what, running your own business is a LOT harder. In many ways you may learn a lot from trying to sell your better architecture to the company.

Just a few thoughts...

The Iron Laws of Software Sales (1)

Aliks (530618) | more than 5 years ago | (#25897417)

Ok so you can totally rewrite the software in a couple of months. Lets say you budget for 1 man year of coding.

Now you have software that works but you don't have a product you can sell. Expect to spend a further man year of effort "productising" the software. You need to make the thing bullet proof enough that someone who was not part of the development team can use the thing.

Now you have a piece of equipment that ordinary people can use, but you still won't sell much. Expect to spend a further 3 man years on the service side so that business folk can rely on your company and product.

Pretty much you can expect 6 times as much investment as you spend coding.

Oh and did I talk about timescales and cash flow?

These calculations are why early service/consultancy revenue is so important, and sadly why sales and marketing folk do what they do, and act like they do.

I know who you are (2, Funny)

Anonymous Coward | more than 5 years ago | (#25897435)

and I am on the way up to your office to fire your ass.

Sales drones? (5, Insightful)

russsell (185151) | more than 5 years ago | (#25897443)

I think your biggest obstacle to success will be your attitude towards salespeople!

As fabulous as you may think your software is, selling it is rather important!

Copyright infringement, theft of trade secrets (5, Informative)

bfwebster (90513) | more than 5 years ago | (#25897449)

Disclaimer: I am not a lawyer and this is not legal advice. So, yeah, get a really good lawyer and get some good legal advice before you do anything.

Over the past 10 years, I have served as an expert witness in a number of IP-related software lawsuits, many of which have a fact pattern pretty much identical with what you've laid out.

Yes, they can sue you on (at least) two different grounds: copyright violation and theft of trade secrets.

The case Computer Associates v. Altai [wikipedia.org] established the concept of non-literal copyright infringement of source code. Even if you rewrote the program from scratch in another programming language, the AFC ("abstraction, filtration, comparison") test could be used to find similarities, and your (former) employer could argue copyright infringement, not just on source code grounds, but on architecture, design, database schemata, and data file structure.

Even if you go one step farther and use a "clean room reverse engineering" [wikipedia.org] effort to rewrite the code, you could still be sued (and lose) for theft of trade secrets. Your employer would need to identify those trade secrets, show what steps it took to protect its trade secrets (typically such actions as IP and/or confidentiality agreements, some measures of physical and electronic security, etc.), and argue for the value of those trade secrets. You would have to show that those "trade secrets" can be documented outside of their history at the company you're leaving.

Note that if any one of your group of "good friends" is seen as having a significant position in your large software company, they can also try to come after you for "breach of fiduciary duty".

In any case, they might well name each of you individually as defendants along with whatever new company you set up to develop this software.

In short, there are major risks to what you are describing and not a lot of upside without an explicit release. It can be done, and done successfully, but lawsuits are expensive. ..bruce..

Nope, you're good (5, Funny)

monkeySauce (562927) | more than 5 years ago | (#25897453)

If you do get sued, just print and cut this out and give it to the judge and you can go home.

________________________
| . / SLASHDOT
|
| This card may be kept
| until needed or sold.
|
| GET OUT OF JAIL FREE
|_______________________|

Dmitry (0)

Anonymous Coward | more than 5 years ago | (#25897459)

From legal point of view your mileage may vary. But from my personal view the situation is clear:

You have a contract with the company:
a. company make initial investment to bring you domain knowledge and specific application experience ;
b. company pays you compensation for your work.

You like to abuse this contract by taking something that is not intent to be distributed by your employer, namely domain knowledge and years of company's experience about specific application. And use that 'know how' to compete with mother company.

The only decent solution is to address your employer with strait query about your intention, possible partnership and terms of transferring his 'know how' to newly established enterprise.

Dmitry Gorbatovsky

Find a Lawyer and Discuss It With Your Employer (1)

Antique Geekmeister (740220) | more than 5 years ago | (#25897543)

Perhaps your existing company would cooperate with you to sign an agreement permitting you to work on such material, free from threats of lawsuit, in return for some perceived benefit such as being able to use the product you support in a very generous licensing or support agreement. Having even one corporate sponsor, and their formal agreement, for a spin-off project like this can really help you gain other customers. You might even consider GPL licensing it to get it out there and help protect your first customers against legal backlash from your current employer, if that's feasible. And they might get some positive publicity as well for doing so.

Think of it as an exercise in negotiation, and I hope your product does well. Please follow up and tell us what it is when you can.

So you work at Microsoft? (0)

srussia (884021) | more than 5 years ago | (#25897547)

Just ask Ballmer for a bigger budget for your project. Just make sure you have your chair-retardant suit on when you do.

Not worth the effort (1)

squoozer (730327) | more than 5 years ago | (#25897553)

At best you are going to be in the situation where your previous employers will hate you with a passion. If your new company doesn't take off you will need to go to them for a reference.

At worst you will spend several months coding the project, struggle like hell to find your first customer and then get sued into oblivion.

I once thought that I could do what you are suggesting but I thought better of it. Now I'm older and hopefully wiser I can see that we would have failed miserably.

The problem is that you know the area in which you work very well so it is tempting to write code that fixes problems in that area. What I suggest you do is look at the periphery of you current employers offerings. Could you, using your domain specific knowledge, improve the way your companies clients handle their data?

Oh, and before I forget, get a lawyer.

How Deep Are Their Pockets (1)

b4upoo (166390) | more than 5 years ago | (#25897565)

Get a good lawyer. Secondly if they lay you off it probably voids your non compete contract. You might also consider keeping your involvement with the new product a secret. Locating in another state might be a great idea. It might be very hard to offer proof as to who wrote the new product if you maintain your privacy with vigilance.
        As for a law suit, these types of things often boil down to who has the most money going in. It doesn't matter a fig if the law is on your side if they drown you in legal expenses to such a degree that you are forced to comply with their demands. Microsoft had a reputation for doing exactly that.

off topic slash dot (1)

alabandit (1024941) | more than 5 years ago | (#25897587)

whats up with the front page?!?!?!?

Re:off topic slash dot (1)

polar red (215081) | more than 5 years ago | (#25897605)

Agree, this SUX.

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