The point about not using your day job's resources is important. Not only could you lose you day job, but your side project as well. Many times when you start working at an organization, they have you sign an agreement saying something like "We own everything that is produced on our machines, network, etc."
I lock my MacBook that I use to work on several side projects on my train commute to my work desk and plug it in to recharge it. I don't open up the lid. Is it ok to use the electricity (it's not the network)?
there's no earthly way that the employer has any rights over your work in this manner, assuming you can prove it's never opened during business hours. They may, however, have a claim against you for the cost of the electricity. :)
Get an explicit written contract from your employer that your side projects are yours and yours alone (a nihil obstat), and then stop worrying about the small stuff like this.
I agree with everything beside the point "You can’t afford to hire three developers to add features and bugs.". You actual can, it just require a little of a financial sacrifice for you. Hiring my first employee was the best thing I ever done, especially when he can work during hours you normally can't.
I have found that the easiest way to keep my day job and startup separate is to have a separate laptop for both so that I'm not tempted to work on startup tasks on the company's computer while on the clock or off. Not too difficult to do during the day but it can be during the off hours when the company's laptop is better than your own.
I think the harder issue is trying to avoid answering emails that are startup related while on the clock. Even if it's webmail they still own the internet at work.
I have a policy of not bringing the work laptop home... it never sets foot in my house so there's no temptation to use it for my side-business.
Ironically, this causes problems with my employer because they'd prefer I had access to company email etc at any time (it's not a requirement of the job they'd just prefer it).
But if I can't use their time, network and electricity, then they can't use mine ;-)
Yep, I do the same thing. I just got a netbook to work on my startup, it's easy to tote around should I find myself in a lunch cafe or coffee shop setting and want to crank out some startup code, and it's cheap, which goes along with my whole bootstrapping my startup thing :-)
On a related note, is it okay to pick up skills related to your side project at work? For example, if my side project is building a application in Clojure, is it okay to learn about Clojure at work? Of course, not at the expense of getting actual work work done, but there's always time between builds, etc. So instead of playing Foosball or surfing the internet, can one actually do something more productive, even though it's unrelated to the current work you are doing?
You have to be careful about things like this. While Foosball and learning Clojure are both not work related, one looks a lot more like work. It's a lot easier to forget where you are and program something cool in Clojure for 2 hours than it is to accidentally play Foosball for 2 hours. Other than that - your breaks are your business (in most states).
IANAL, but I think there's pretty strong precedent that the employer can't assume ownership over any non-proprietary information you learn (languages, design patterns) at work.
Of course, we live in a proto-fascist state where legal combat is often won by those with the most money, so it'd be dangerous to assume that past sane decisions will carry into the future.
I don't think companies can own knowledge, mainly because it is physically impossible. Once they figure out how to remove knowledge from the mind, then maybe they can.
From a legal point of view, this is actually really good advice. It adequately stresses the importance of making really, really sure that you are not bound by any anti-compete or IP clauses or what have you, or get released from them by your employer. To non-legal people, the advised measures may seem ridiculous; let me assure you, they are not. They are well within the minimum you need to do.
For your startup, it's not about if the courts will, after several months or even years, uphold your IP rights. It's about ever getting sued and game over.
Stupid question: if your startup gets sued over something like this, why not have the company declare bankruptcy, dissolve it, and start a new company in the same idea with some of the same employees? (If you have investors who'd get burned in this process, tell them that they can avoid this fate if they commit sufficient resources to win the lawsuit; if they do, then this is the best possibility.)
It seems like it wouldn't be that hard to hide enough in the way of resources (relationships, ideas) to get a good start on Act 2. You'd lose your office and a few months of salary, and need to find new investors, but this doesn't seem as severe as "game over".
It seems like 85% of startup time is figuring out what works and what doesn't, so you can "kill" the code (i.e. shunt it out of view, and then use it as a reference in a comprehensive rewrite, possibly in a different language so there's no doubt as to your new code being yours) and your cost is only the 15% of the time necessary to implement the ideas that you now know will work.
Because the lawsuit would include you, the defendant, personally, and not just your shell company?
I don't know if this would work, having never had to do it, and it's extremely unlikely that I ever will, but then I'd hire someone to put severe pressure on decision-makers at the plantiff and make it very clear that they don't want to dance this way. Hiring a "pro negotiator" of this sort is expensive, but cheaper than losing a company, a livelihood, and having future wages garnished.
When legal action becomes unaffordable and favors the rich, people will resort to illegal action. And I don't fear death enough that I'd let someone disrespect me in such a way without taking his own fall.
[quick legal advice: if a trick sounds too easy, it probably won't hold in court]
This I doubt, given that the vast majority of white-collar crime never leads to an indictment, and the penalties are so minor relative to the rewards that it persists in spades. (This is not to say I'd advise white-collar crime, the vast majority of which is utterly unethical and dishonorable scumbaggery. I'm only saying that the vast majority of criminals in our society get away with it.)
Investors most probably won't invest in your company at all if they know you probably will have significant IP trouble. Law suits are money-dumps, which is why the small guy never seems to win. They drop out earlier or stop from the beginning because they just don't have the funds. No investor will invest in you if e.g. 50% of his funds are going to be used for law suits.
Also, if your employer has IP over your idea/process/whatever, he will sue your next company as well.
Wouldn't the adversary need a patent first to own a process?
Code can be re-written, and I'd argue that it absolutely should be in such a case.
And obviously, using company resources for the side project is both idiotic and unethical. I'm not talking about that. I'm talking about the case where someone writes something entirely on his own time and gets sued because of a coves-all-hours contract that effectively placed him in indentured servitude (and that shouldn't be allowed to exist in the first place).
Not exactly. It comes down to the other party not being able to prove that it was their code or that they were in violation of the other party's IP. The longer the other party waits with suing you, the more chances you have of getting off the hook. It happened with the German (code+design) clone of Facebook as well. FB waited for far too long before suing, now they basically lost the case.
So I have a friend (it could be true) considering starting a business on the side and he agrees with all of these points. After reading this article, however, he realized that he did sign some type of agreement saying anything he does is property of the company, even if it was at home. At the time he wondered whether this was normal, but as it was the standard company contract, he signed it.
Talk to a lawyer familiar with those issues in your state. It depends on what he signed and your state's laws. No matter what, it's still best to disclose it to his employer, just like this article suggests and patio11 also suggests: http://www.kalzumeus.com/2010/03/20/running-a-software-busin...
These agreements are pretty normal. As others have already pointed out, suggest your friend talk to a lawyer. And don't sign any fresh agreements prior to that conversation.
Quite a few states have laws limiting the scope in both time and 'intellectual space' over which your employer may claim rights. In Washington (I'm not a lawyer, but I have recent experience with this), the law limits PIAAs to development using company resources, in the same or prospective market, and term of employment +6 months -- and burden of proof is on the employee. From what I researched at the time, this seemed to be about the middle of the road for employee-cum-entrepreneur legal protections. I'm not sure it matters in the end...if you can't afford to leave your job, can you really afford a legal battle with your behemoth ex-employer? The best way to avoid needing the legal protections is to be open, transparent, and avoid conflicts of interest.
Sorry, but from a legal point of view, this is just really bad advice. There can be legal consequences, please consult with a lawyer about IP stuff, your employment contract and if they can later sue you for breach of contract etc. It really depends on your jurisdiction, though.
I know I shouldn't be reviving a deleted post, but I'm actually curious about how people get caught doing this (crediting an untethered co-founder for their work). It seems like, if you use resources that are unambiguously possessed by him, it would be impossible to prove that you wrote the code.
Simplified, I think it has to do with the burden of proof (may depend on jurisdiction). So your employer tells the court that he can prove (logs) that you developed some code at your workplace, then 'stole' that code, which is your employer's intellectual property, and went ahead with your own startup, doing suspiciously similar things. Now it's basically your problem of how to prove that it's not like that.
Depressing, but seems accurate. Only a corporatist society, flirting with fascism, would place burden-of-proof on the employee-- what ever happened to presumed innocence?-- but I guess that's what we've come to.
Don't get me wrong. I'd never advise anyone to write side-project code at work. In addition to being unethical, it's also patently idiotic. I'm talking about the case where someone gets up at 5:00 am to write the side-project code on his own resources and then gets sued because his former company decides to be a scumbag.
There's some validity in a company sueing an employee because they're not getting enough sleep to perform appropriately at work. However, this is normally cause for warnings + termination. It's unusual for a company to link this with potential unrealized income and therefore try and acquire ip.
There's some validity in a company sueing an employee because they're not getting enough sleep to perform appropriately at work.
First, no there isn't. You can fire someone because he's incompetent because he gets too little sleep to do his job, but suing is ridiculous. What if he just has insomnia?
Second, my assumption was that getting up at 5 am implied going to bed earlier. If you're sleeping 1 to 5 and have normal sleep needs, doing this for any length of time will ruin both the side project and the day job.
Most people would be more productive on their side project and at work if they got up at 5:00 am to pursue some kind of passion.
It doesn't really matter what proof you have. If your employer is suspicious and takes you to court, you've already lost. If you have tens of thousands of dollars to spend on legal fees in order to prove your point, then I guess this advice doesn't apply to you.
What if I am a developer in the day job, but I don't code for the the startup, and the technology we use is totally different from my employer, will there be a IP concern?
As the article points out, you just can't work on your startup while at work at your day job. So if you're not answering emails, blogging, coding, testing, whatever, than you should be fine :-) Also check your non compete, some employers get a little crazy about it and may try to claim ownership of anything you do, even in your off time. Of course IANAL.
