How do I protect my ideas when ending a partnership? 8 Answers as of August 01, 2011

I had an idea for an iphone application, and partnered with a programmer and a designer to implement it two months ago - verbal agreement, they have 50% equity. We're close to launch-ready, but the relationship has been rocky as they won't listen to me. None of us is happy in the partnership, and we all agree launching under these conditions seems imprudent. I'd like to develop my idea with somebody else, or perhaps hire a programmer. The only written agreements are standard NDAs, including non-compete, they signed before I told them my idea. 1) A number of important features and strategies have been added to the original idea over the past two months. They initially suggested some of these ideas, but many of them were formed through our joint discussions. Can I safely use these features in my new company? Does it matter who thought of what during the partnership? 2) How different from the designer's layout and appearance must I deviate to be safe (he's mad, and says I can't use his designs)? 3) Since I brought the original idea, and they signed a non-compete agreement, they aren't allowed to release their code are they? I don't want to compete with them. thanks for helping me out!

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Edam Law PLLC
Edam Law PLLC | Edmar Mauricio Amaya
Wow, Complicated questions... The best way to solve these issues is to do cross-licensing agreements. The original idea if not protected by a patent or patent application is only protected by trade-secret law. Trade secret law will protect your idea only to the point you voluntary tell it to some one else. If there was a confidentiality agreement in place, to the extent the contract protects it. You going to have to look at the language of the contract. You might have several causes of action if they broke the agreement and took the confidences within. Their defense will be that the contract is not valid and any other contract defenses. 1. jointly added features are considered improvements and both of you can claim these features in a patent as co-inventors. Inventor ship is something that can not be changed, if at least one claim came from any of you, you are both inventors. Unless the original contract talked about improvements you can both independently exploit the improvements. 2. it has to be a significant change, in your case an improvement of the joint improvement. The standard is obviousness, a legal term very difficult to explain, but it can not be a trivial or insignificant change. 3. You are correct, if the code is described in the confidentiality agreement, they should license your code, but again, the contract has to be valid etc. You need a lawyer to review it and make sure is a valid agreement. So, the best most economical way is for them to license your original code and you to license their piece of contribution in an exclusive license. You can always improve and be a better competitor in the market place. In order to prevent them from using your software altogether, you are going to have to sue them from breach of the confidentiality contract. I hope this helps.
Answer Applies to: Florida
Replied: 8/1/2011
Barton Barton & Plotkin
Barton Barton & Plotkin | Maurice Ross
This is complex. You need to retain counsel to review the NDA and many other factual details. Further, you need to negotiate a settlement. Unless you do so your partner will have string arguments that it is a coinventor. I do not think your partner could launch legally without your approval but you cannot safely launch either. You need to retain counsel to draft and negotiate a settlement. If you fail to retain counsel you are making a huge mistake d.
Answer Applies to: New York
Replied: 7/31/2011
Mark S. Hubert PC
Mark S. Hubert PC | Mark Hubert
You can use all of the features in your new venture - you would be a co inventor of much of it and a sole inventor of the rest.
Answer Applies to: Oregon
Replied: 4/26/2011
Handal & Morofsky LLC
Handal & Morofsky LLC | Anthony H. Handal
Frankly, there are no easy answers here. The best course of action would be to reach agreement with your partner on dissolution. It seems some work has been done and that the work has value, so it may be worth paying for some rights to it. But if the work has not been properly documented, it may be useless to your next programmer.

Nevertheless, it may just be better to pay your partner something in exchange for the clear right to use all developments. You probably want to make it clear that they cannot use the IP you are paying for, and of course this agreement should be in writing. Under the circumstances you would also be well advised to seek counsel to draft that agreement. However, a few rules might guide you in deciding what would be a fair deal. It seems unlikely that you explicitly gave up any rights to the original work, but depending on the investment they made, they may have some equities going in their favor. Your nondisclosure agreement may have provisions that help you in this area. Typically such provisions deal with ownership of the underlying technology.

In addition, your e-mails back and forth may evidence your agreement and together define the terms of that relationship. Ideas they suggested could be problematic. However the nondisclosure agreement may help here also. Depending on the equities, the same might apply to ideas you suggested and ideas you jointly developed. However, the subsequent course of the relationship can always vary the nondisclosure agreement. If you cannot come to an agreement on dissolution, they may claim that the only way for them to recoup their investment is to release the code. If they did that, however, they would probably be obligated to share this with you. Of course this depends on what the evidence shows are the terms of your agreement. So overall, try to work it out, as it looks like they are amenable to resolving the issue. On the other hand, if you can't work it out, you'd be well advised to start fresh with a programmer who never even saw anything done by the old programmer and designer.
Answer Applies to: New York
Replied: 4/26/2011
Intellectual Property Center, LLC
Intellectual Property Center, LLC | Ak Shaf
In a situation like this one, the details are critical and any advise will need to be based upon the contract, the terms of the verbal agreement and the specifics of the development and applications which were developed. While you provided quite a bit of information, i would suggest you contact me or another attorney as soon as you can to discuss resolving the matter as soon as possible.
Answer Applies to: Kansas
Replied: 4/25/2011
    Malhotra Law Firm, PLLC
    Malhotra Law Firm, PLLC | Deepak Malhotra
    First be aware that there are two major types of intellectual property involved with softwarepatents and copyrights. If you hire a programmer to write code for you, it is likely that, by default, you own the patent rights but they own the copyright rights. You own one copy. Copyright law is biased to protect artists. Patent rights originally vest with the inventor, the person who had the idea. Your original ideas are probably yours and the NDA gives you the right to sue them if they disclose. This may or may not be worthwhile unless they have assets. Ideas they suggested are probably theirs, in terms of patent law. But they will have to file a patent application to get those rights. In terms of copyright law, whoever does the coding owns the copyright, absent agreements. There is no requirement to file copyright applications, but big advantages to doing so. It may boil down to you having some patent rights and they have copyright rights. You should probably file a patent application on your original ideas.
    Answer Applies to: Washington
    Replied: 4/25/2011
    DANIEL NESBITT | Hasse & Nesbitt
    This is not a general question about the operation of patent or IP law, but a request for legal advice for your specific matter. Be prepared to engage (and pay for) a lawyer to provide you the competent advise you appear to need.
    Answer Applies to: Ohio
    Replied: 4/25/2011
    Michael M. Ahmadshahi
    Michael M. Ahmadshahi | Michael M. Ahmadshahi, Ph.D., Esq.
    Documentation is key in this case. Whoever can provide paper trail of who has done what would have the upper hand. As a general rule, non-compete agreements are not favored in California courts, meaning they might not provide either of you much protection especially at startup phase. The NDAs should probably be reviewed closely by a professional (attorney) to see the extent of protection, if any. However, in this case it might be better to reconcile or if that's not possible then follow through with obtaining patents on the ideas as joint inventors, assuming the ideas are patentable. Each joint inventor has an undivided interest in the patent in its entirety which means they can exploit it as they wish individually, of course the proceeds will be divided proportionately.
    Answer Applies to: California
    Replied: 4/25/2011
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