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Rewriting a Software Product After Quitting a Job?

Posted by kdawson on from the clean-room-white-coats dept.

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."

24 of 604 comments (clear)

  1. the short answer by ILuvRamen · · Score: 5, Insightful

    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.

    --
    Google's Super Secret Search Algorithm: SELECT @search_results FROM internet WHERE @search_results = 'good'
    1. Re:the short answer by hellion0 · · Score: 5, Insightful

      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.

      --
      Do I get bonus points if I act like I care?
    2. Re:the short answer by TapeCutter · · Score: 4, Insightful

      "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.

      --
      And did you exchange a walk on part in the war for a lead role in a cage? - Pink Floyd.
    3. Re:the short answer by Anonymous Coward · · Score: 5, Insightful

      Keep in mind IANAL, but we had a situation where I work that might be applicable. Our company bought another company (I'll call this other company X) that had a product offering we wanted. The founder of company X was paid a good deal of money and signed a non-compete that was in effect for 1 year.

      During this 1 year time period, the founder of X used the money and hired a staff to build a competing platform with a new design and better technology, something he was able to afford while running the business himself.

      On exactly the day after the 1 year non-compete ended, he opened his doors for business and started selling. There was nothing we could do about it because he had not competed with us during the time of the non-compete, he simply used that time to build a new platform. It was all new code, so we couldn't get him for that. We did investigate the data he was using but he had acquired it himself, from the same sources we used.

      His new company sold to our competitor a couple of years later and he made another bundle. He's now under non-compete again, but has already started work on a third generation for when that one ends.

      All this is saying, if you properly document your work to show it is all original, do not attempt to sign up any customers during any time period under which you may be covered by a non-compete -- not even beta customers, and more importantly don't continue working for your current employer, then I would think you would be ok.

      The big thing though is to break all ties with your current employer, and you may even want to avoid meeting with folks that still work there. All the lawyers need is one thread connecting you to your current employer to make a case that they can claim your efforts, and since an established company generally has lawyers on staff and you don't, they can out spend you in litigation to the point it won't matter who is right.

      I would suggest you and and your friends find an outside attorney to discuss the situation with, and be certain to have details of any statements you signed when you started working at your current employer.

    4. Re:the short answer by aurispector · · Score: 5, Insightful

      The point of having a good lawyer is to ensure that you never need his services.

      --
      I have mod points. The reign of terror begins now.
    5. Re:the short answer by Thaelon · · Score: 4, Insightful

      out spend you in litigation to the point it won't matter who is right

      This might be the most fucked up fact in human society.

      Any legal system that has this problem should be considered utterly broken and dire need of disposal sooner rather than later.

      --

      Question everything

  2. Get a lawyer. by PoprocksCk · · Score: 4, Insightful

    Subject.

    1. Re:Get a lawyer. by who+knows+my+name · · Score: 3, Insightful

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

      --
      Nothing to see here.
  3. Why make your lives difficult? by bradley13 · · Score: 3, Insightful

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

    --
    Enjoy life! This is not a dress rehearsal.
  4. Contrary to popular opinion... by bigmouth_strikes · · Score: 5, Insightful

    ...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.

    --
    Oh, I can't help quoting you because everything that you said rings true
    1. Re:Contrary to popular opinion... by IamTheRealMike · · Score: 5, Insightful

      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 before moving this beyond just talk.

    2. Re:Contrary to popular opinion... by mgblst · · Score: 4, Insightful

      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.

    3. Re:Contrary to popular opinion... by Icarium · · Score: 5, Insightful

      Heh, some of our former employees tried the exact same tactic, and as an added bonus actually managed to convince one of our sizeable customers to go with them, all based on promises of being able to give them a better system with more features using the latest and greatest programming languages that were the rage at the time. (I'll freely admit that the company I work for still uses COBOL on it's older clients business systems)

      The both lost - 5 years and many, many millions down the line the customer turned round and said "Right, this isn't working, we want our old legacy system back". In that time these former employees and thier new company were unable to provide a rewrite that was as stable, fast or feature laden as the system they were rewriting it on, so the customer simply came back to us and said "Where do we sign?".

      The most amusing part was when the negotiations were taking place, the former employees tried to sell us thier IP and the system they had developed. Our CEO simply laughed at them.

      Don't get me wrong - I fully admire what they attempted, but the manner in which they underestimated what it would actually take to rewrite a legacy system (incorporating 23 years of ongoing development) from scratch was a perfect example of "If it ain't broke, don't fix it".

    4. Re:Contrary to popular opinion... by nine-times · · Score: 5, Insightful

      are we really sure that management and the "sales drones" are fundamentally incompetent, and that we are fundamentally better?

      I would even ask, are these programmers really making the product they think they are? I've seen it happen before that a bunch of developers complain about their sales people, essentially that they were selling it wrong. The salespeople kept focussing on feature set A, while the developers thought feature set B was much more important.

      And the problem there was that the customers cared about feature set A, and the salespeople knew it because they were the ones talking to the customers. The developers seemed to be more interested in developing what was fun/interesting to develop, while the customers just wanted certain specific functionality.

    5. Re:Contrary to popular opinion... by BlortHorc · · Score: 3, Insightful

      And it has to be said, though most sales guys are useless, the really good ones are gold. There is a guy where I work who has turned wrong numbers into sales. That is seriously hard work, and for all I might bemoan his lack of IT skills, gotta give the guy his props. Sales is a hard job, especially cold calling, and what will make an idea like the GP has work more than anything is who he has selling it.

    6. Re:Contrary to popular opinion... by jcnnghm · · Score: 4, Insightful

      To re-iterate, management and sales are hard. If you don't have a marketing plan and strategy from day one, and you guys think you can just build a better product than your current employers in six months, expect to fail.

      How wealthy are you? Most businesses operate in the red for the first 2-5 years. What that means is that, even after all the revenue, you'll have to loan money to the company, or secure a loan for the company (much easier said than done, you can generally only get business loans for hard assets), to be able to pay the expenses, and those expenses include no money for you or your co-founders. Can you afford to work for -$x for 2 years. If you are under capitalized from the start, you will fail.

      How much time do you have? If you think you're signing up for a 9-5, show up, program, and leave, you're in for a rude awakening. Operating a businesses is significantly more time intensive than you think it is, and chances are you won't be able to afford all of the 'worthless' support staff that your current company has. All the jobs they do, you get to do too. Expect to work no less than double time for the first couple of years, and more realistically be prepared to spend all of your time on it. Underestimating, being unwilling, or being unable to commit the necessary time will lead to failure.

      How risk adverse are you? 80-90% of businesses fail within the first 5 years. Are you, having made no money after 20 months, going to cut your losses and walk away? What about your co-founders? You have to be prepared to accept the fact that you could potentially lose ever dollar you put into your company. If you're not, don't even consider this.

      --
      You don't make the poor richer by making the rich poorer. - Winston Churchill
  5. Short answer: by ZorbaTHut · · Score: 4, Insightful

    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.

    --
    Breaking Into the Industry - A development log about starting a game studio.
  6. Prevent the lawsuit. by rjh · · Score: 5, Insightful

    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! :)

  7. the short hairs. by Ostracus · · Score: 5, Insightful

    "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?

    --
    Shai Schticks:"You don't make peace with friends, you make peace with enemies"
    1. Re:the short hairs. by davester666 · · Score: 5, Insightful

      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).

      --
      Sleep your way to a whiter smile...date a dentist!
    2. Re:the short hairs. by mrchaotica · · Score: 4, Insightful

      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.

      Perhaps the solution in this case is to retain a lawyer on staff. This is a startup, right? Since they're anticipating fairly extensive legal issues from the get-go, they should hire a lawyer as a full-time employee, which would limit costs to be equal to his salary. They can pay him using venture capital money (just like how everybody else would be getting paid) until they have a sellable product.

      --

      "[Regarding the 'cloud,'] ownership was what made America different than Russia." -- Woz

  8. Sales drones? by russsell · · Score: 5, Insightful

    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!

  9. Re:How to survie in a sue rich environment... by Anonymous Coward · · Score: 3, Insightful

    your friend seems like a giant asshole.

  10. BSD 4.4 lite by tg123 · · Score: 4, Insightful

    I am Ashamed of you people, this is slashdot and someone here has just given us a Dorothy Dixer. (Please note this is my interpretation I'm tiny whinny bit biased) Well you see there was this Operating system called Unix that was written in the 1960's.... AT&T which was a phone company couldn't sell, due to the laws at the time, software so they allowed Unix to used by University's for a small fee. [this is probably a bit loosely based on truth here] In the 1980's the laws changed and AT&T could sell software. Well AT&T said everything to do with Unix is ours and any software that has been added to Unix by the University's is also ours and pays us Mega amounts of cash to use it. Well some people at University of California Berkeley (UCB) got very annoyed with this and released a version of UNIX without any AT&T code. This version was called BSD 4.4-lite a court battle then ensued that ran until the mid 1990's. Novell then purchased Unix from AT&T and some sort deal was done and UCB no longer distributes BSD. heres a link to the story. http://oreilly.com/catalog/opensources/book/kirkmck.html so lessons learnt 1) You will get sued 2) If you hang in there you might just win 3) Be prepared to cut a deal 4) [maybe this should have been first] Get a good lawyer !!! 5) You ever here of a guy called Richard Stallman ? - sort of the same thing happened to him but he started something called the free software foundation. http://www.fsf.org/