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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."

12 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.

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    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.

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    2. 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.

    3. 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.

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  2. 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.

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    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 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".

    3. 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.

  3. 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! :)

  4. 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?

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    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).

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  5. 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!