Ask HN: Who owns the idea?

https://news.ycombinator.com/item?id=1779960

by throwaway5 • 16 years ago

25 32 16 years ago

news.ycombinator.com

Hi Guys,

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.

The relationship has now broken down, due to disparities in levels of commitment. I want to take the idea (I came up with it & 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.

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.

So, who owns the idea? Can I start a similar company?

I plan to consult a lawyer but I just want to gauge the HN community's thoughts on this.

In advance, thanks for your time!

bond• 16 years ago

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...

bdfh423• 16 years ago

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.

throwaway53• 16 years ago

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?

arethuza2• 16 years ago

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.

bdfh423• 16 years ago

Copyright should only apply to the code body that was written - re-writing the same functionality from scratch should be fine but it might be wise to take extreme care to ensure that none of the original code gets included by mistake or that any similarities are anything more than superficial.

If you are going to have to take on new developer resources anyway then a re-write from scratch might not be such a bad thing.

hansel• 16 years ago

this makes a big difference from 'just an idea'. I would do two things: 1) offer them some equity based upon what would have been fairly vested (you will have to negotiate this, but start with room to get to "fair" but not insultingly low. base it upon hours invested) 2) offer them a chance to invest cash in your new venture so that the 'idea' can live on with a dedicated team and some cash resource. im assuming that they just lost interest or don't have the time, but may have cash.

earle• 16 years ago

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.

wccrawford• 16 years ago

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.

rumpelstiltskin2• 16 years ago

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

brandnewlow• 16 years ago

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.

lincolnq• 16 years ago

Well, they settled. I think they were arguing that they had an implied contract with Zuck, not (primarily) that he stole their idea.

SemanticFog• 16 years ago

Not at all.

If Zuckerberg had told the Winklevi he planned to quit and start a competing site, then there would have been no lawsuit. The harm was intentionally misleading them, so they wouldn't find a replacement programmer to finish their own site.

Your best bet is to be aboveboard, and get people to sign off on whatever they agree to, so they can't come back later with a changed story.

jacquesm• 16 years ago

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

After all, they can :)

bherms• 16 years ago

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)

SHOwnsYou• 16 years ago

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.

throwaway53• 16 years ago

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• 16 years ago

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.

webwright• 16 years ago

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.

arethuza2• 16 years ago

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.

jules• 16 years ago

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

ronp• 16 years ago

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• 16 years ago

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%.

javery• 16 years ago

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.

throwaway53• 16 years ago

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.

siculars• 16 years ago

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.

rdj• 16 years ago

"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.

Udo• 16 years ago

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.

SteveMorin• 16 years ago

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.

DirtyAndy• 16 years ago

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).

cvg• 16 years ago

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

Ask HN: Who owns the idea?

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