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Rewriting a Software Product After Quitting a Job? 604

Posted by kdawson
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."
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Rewriting a Software Product After Quitting a Job?

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  • Tread carefully (Score:5, Informative)

    by zarthrag (650912) on Wednesday November 26, 2008 @04:03AM (#25896937)
    Even if it were safe, I'd expect there would be a lawsuit no matter what. I'm sure there's a ton of other programmers out there who have similar thoughts. As companies grow older, they seem to become more and more stymied by a PHB than driven intellectually by those who first made it's growth possible. Just make sure your starting group retains some council - and be sure to file as an LLC, also.
  • Re:Slashdot ? (Score:3, Informative)

    by Randle_Revar (229304) <kelly.clowers@gmail.com> on Wednesday November 26, 2008 @04:21AM (#25897091) Homepage Journal

    Also, following this link [1] will fix the front page, but not the user page. Credit to AKAImBatman

    [1] http://slashdot.org/index.pl?usebeta=0 [slashdot.org]

  • Re:Short answer: (Score:5, Informative)

    by rachit (163465) on Wednesday November 26, 2008 @04:42AM (#25897179)

    You could save the money on a lawyer.

    You'll likely get sued regardless of whether they have a case or not. If you have the money to fight it, it will drag on for some time.

    If you ever need to raise money, no VC will invest in your company if they know you have a potential legal liability.

    Depending on the nature of the software (more likely to happen if its expensive / low volume), your previous company may try to harass your customers too.

    It sucks, but its the nature of the game. Unless the current company that you work for isn't willing to do anything quasi-legal to preserve their business.

  • by _Shad0w_ (127912) on Wednesday November 26, 2008 @05:32AM (#25897391)

    Enterprise Liability [wikipedia.org].

  • Re:the short hairs. (Score:5, Informative)

    by sumdumass (711423) on Wednesday November 26, 2008 @05:33AM (#25897393) Journal

    I know people who have lost outrageous suits because they failed to show up in court. I'm sure these suits would have been tossed out had they showed up because two of the people (5 where sued) had their lawyers who had it tossed in no time. 2 of the remaining 3 got lawyers and had their judgment overturned on appeals citing something about not being served notice properly and the last one doesn't want to spend the money because he got busted for some felony and will spend most of his life in prison.

    In some areas, you have to show more then in others and the lawyers know what the minimum is and sometimes refuse to file (it makes them look bad). But once the case is filed, it doesn't disappear until some action is taken on it. The judge can't or doesn't throw something out without a request. IF no one requests it to be tossed out, then he can rule that there was no standing or whatever.

  • by Anonymous Coward on Wednesday November 26, 2008 @05:41AM (#25897425)

    In some cases, if the company can demonstrate that you obtained the knowledge to write your new system while working for them, they may have a claim.

    There are more things to consider than copyright law.

    IANAL

  • by bfwebster (90513) on Wednesday November 26, 2008 @05:47AM (#25897449) Homepage

    Disclaimer: I am not a lawyer and this is not legal advice. So, yeah, get a really good lawyer and get some good legal advice before you do anything.

    Over the past 10 years, I have served as an expert witness in a number of IP-related software lawsuits, many of which have a fact pattern pretty much identical with what you've laid out.

    Yes, they can sue you on (at least) two different grounds: copyright violation and theft of trade secrets.

    The case Computer Associates v. Altai [wikipedia.org] established the concept of non-literal copyright infringement of source code. Even if you rewrote the program from scratch in another programming language, the AFC ("abstraction, filtration, comparison") test could be used to find similarities, and your (former) employer could argue copyright infringement, not just on source code grounds, but on architecture, design, database schemata, and data file structure.

    Even if you go one step farther and use a "clean room reverse engineering" [wikipedia.org] effort to rewrite the code, you could still be sued (and lose) for theft of trade secrets. Your employer would need to identify those trade secrets, show what steps it took to protect its trade secrets (typically such actions as IP and/or confidentiality agreements, some measures of physical and electronic security, etc.), and argue for the value of those trade secrets. You would have to show that those "trade secrets" can be documented outside of their history at the company you're leaving.

    Note that if any one of your group of "good friends" is seen as having a significant position in your large software company, they can also try to come after you for "breach of fiduciary duty".

    In any case, they might well name each of you individually as defendants along with whatever new company you set up to develop this software.

    In short, there are major risks to what you are describing and not a lot of upside without an explicit release. It can be done, and done successfully, but lawsuits are expensive. ..bruce..

  • Re:Tread carefully (Score:5, Informative)

    by ORBAT (1050226) on Wednesday November 26, 2008 @06:17AM (#25897581) Homepage
    Or how about just linking to the article (here [zoion.com]) instead of making us jump through hoops?
  • by tknd (979052) on Wednesday November 26, 2008 @06:28AM (#25897625)

    You have to be careful because unless you really understand how the laws work, you can get into trouble for just following advice even from a lawyer. For example there's something known as "piercing the corporate veil" which gets around setting up fictitious corps for the purpose of insulating another entity. In order to do this, one must prove that the corporation in question does not act as a corporation should (have a board, have a corporate account and books, have records of board meetings, etc).

    Also keep in mind that lawyers often operate as partnerships so they too are businesses. Their duty as an agent is to of course act in your best interest but as a business they're hired to "win". So of course they might say that you can do such and such but it all depends on how good of a lawyer they are and how well their experience or advice will hold up against the competition's lawyers.

    Sure, you should speak to a lawyer but if you really want to play dirty you'd better take a business law class and understand the rules of the game yourself. To do otherwise is just like walking through a gauntlet blind.

    This advice is for the OP. You, the parent, may have had experience with this already and know what you're doing to get away with it.

  • Re:Tread carefully (Score:5, Informative)

    by cgenman (325138) on Wednesday November 26, 2008 @07:07AM (#25897823) Homepage

    Remember, employment contracts usually cover ideas created while at a company as well as implementations. Check yours carefully, but chances are they already own the rights to the idea of what you're going to create, simply because you thought of it while working at the company.

    On another note, it sounds like what you're doing is "management doesn't want us to do this properly, so we're going to leave and do it on our own." You're current company turned down one direction it could take, and you want to follow it anyway. Unfortunately, at this point that's their business plan whether they optioned it or not.

    "look and feel" copyright claims have also been upheld in many courts, so you might want to avoid doing too close of a copy.

    It sounds like you're getting yourself in for a world of hurt. If your "large" software corporation is truly large, they can simply outsurvive you in a lawsuit, whether or not they win. And considering what you're doing, there may very well be a strong enough case that a good lawyer can win. And that's all they would need to shut you down.

  • Re:the short hairs. (Score:5, Informative)

    by KiloByte (825081) on Wednesday November 26, 2008 @07:32AM (#25897971)

    Fixing this doesn't even require changing any actual code, since everything on the way supports Unicode well.

    Steps required: convert existing comment data to UTF-8 (ok, that's a delicate one considering the size of the table), make Apache use UTF-8 as well, and possibly fix some filters.

    Using an ancient charset like 8859-1 in this millenium is nothing but retarded.

  • by blackchiney (556583) on Wednesday November 26, 2008 @08:03AM (#25898133)
    There is an old saying it is better to ask for forgiveness than ask for permission. I've seen this work so many times in real life that it flies in the face of everything I was taught at school. Chances are the court is going to be more forgiving if you did it and then were sued rather than if you asked and did it anyway. It's like speeding tickets, if the judge asked you if you knew the lower limit and you say no, then s/he'll be sympathetic. More so than if you did know but broke the law anyway. Most likely, the company won't bother going after you (lawyers are expensive no matter who sues/ gets sued) until you become a visible, credible threat. Once you are you'll have a bit of money to mount a defence, offer a settlement, etc. I write software. There are a lot of companies that write software just like mine. A few are bigger than us, most are a lot smaller than us. We might step on the feet of the big guys from time to time. And them likewise. We never hear from or bother with the small guys.
  • by Anonymous Coward on Wednesday November 26, 2008 @08:24AM (#25898227)

    While certified mail is a popular form of service in civil suits, there are several other options lawyers have for serving papers.

    -For a corporation, papers can be served directly to the president, VP, executive secretaries, etc. (varying by state of course). Professional process servers are people paid for just this purpose- they walk right up and hand you the papers, and you're served. Modern detective agencies will have no problem locating your residence for this purpose, and servers have been known to go on 'stakeouts', waiting for the defendant to show up or leave and then surprising them with papers.

    -Service by Publication: when a defendant can't be located, and plaintiff can show that they made all their best efforts to do so, they can serve you by publishing a notice in the area newspapers, or in related professional journals. Failure to show up and defend yourself will result in a default ruling against you- not a wise move. Some lawyers of dubious repute use this as their first method, for just that purpose, often to the surprise of the defendant, and also build negative publicity around the defendant. Of course you could contest being served that way... but then you'd have to show up to court.

    IANAL, but I did stay at a Holiday in Express last night...

  • Re:the short answer (Score:3, Informative)

    by KevMar (471257) on Wednesday November 26, 2008 @09:18AM (#25898589) Homepage Journal

    A non-compete generaly has a limit to it. Check the wording on it closely. I have 2 possible solutions you could ask your layer about.

    1) Start working on it as a personal project with friends. Do not form a company at first. You could have someone's sister start the company and register the domain. Once the non-compete expires, every one make it official.

    2) Hold off on getting any customers or doing any releases until after the non-compete expires. If challenged in court, present the fact that they can not present any evidence of competition. Not a single clinet of your was a previous client of theirs and none of your current clients could use the other product as an alternitive.

    3) Get the ok from your boss before you leave to join a software start up that your friend started. Mention to him that they dont have any product yet but it is a software company. Ask him if that makes it in conflict with the non-compete that you signed when started.

  • Re:the short answer (Score:3, Informative)

    by geminidomino (614729) * on Wednesday November 26, 2008 @09:56AM (#25898903) Journal

    Exactly. If you *need* a dead lawyer, you're just SCREWED

  • The "erocS" issue (Score:3, Informative)

    by tepples (727027) <tepples@nOSpAM.gmail.com> on Wednesday November 26, 2008 @09:56AM (#25898905) Homepage Journal

    Steps required: convert existing comment data to UTF-8 (ok, that's a delicate one considering the size of the table), make Apache use UTF-8 as well, and possibly fix some filters.

    "And possibly fix some filters" is much easier said than done. Please read my previous post [slashdot.org] about why the installation of SLASH on Slashdot is configured to whitelist characters.

  • Re:the short answer (Score:3, Informative)

    by Progman3K (515744) on Wednesday November 26, 2008 @10:02AM (#25898953)

    Being a programmer, your skill is programming and it is normal that you work in programming.

    If you get laid off, you may work for a competitor, otherwise that would mean your ex-employer is deliberately trying to prevent you from making a living. If the only programming job you were able to find were for a competitor, you could not be expected to turn it down since you need to have a livelihood.

    If you didn't get laid off but quit and the employer wants to prevent you from working for a competitor, your ex-employer must pay you the money you would earn doing so for the period of time of your non-compete agreement. In effect the ex-employer would pay you for sitting on your ass for the non-compete period.

    In other words, no one may deprive you of making a living in your chosen field.

    Or in other words "Money is money"

  • Scorched earth (Score:3, Informative)

    by halcyon1234 (834388) <halcyon1234@hotmail.com> on Wednesday November 26, 2008 @10:30AM (#25899229) Journal

    Before leaving the company, delete all the existing code, smash the servers, shred the backups, bomb the offsite storage, and slaughter any employee or customer who doesn't follow you. That way when you do release your product, there will be no one left to try sue you-- and even if there is, they don't have a product to use as evidence anymore.

    (Suggested because this advise is just about as good as anything else you'll get on the thread. Get a lawyer. Seriously, why to people insist on asking Slashdot "How do I do this legally questionable thing without getting caught?". Do you really thing that when you do get sued, you can go to court and use as an excuse "because halcyon1234 told me it was ok"?)

  • Re:the short hairs. (Score:4, Informative)

    by Z00L00K (682162) on Wednesday November 26, 2008 @11:03AM (#25899581) Homepage

    Oh - you can write non-ascii characters, but you will have to write the character entities yourself:

    "Räksmörgås."

  • by MarkvW (1037596) on Wednesday November 26, 2008 @11:10AM (#25899665)

    Contemplate four things:
    (1) The "Law." Does it favor you?
    (2) The "Facts" Will you be able to prove that the law is what you think it is?
    (3) The "Legal War Chest" Can you afford to prove "the facts?"
    (4) The "House Lawyer" Can you afford a house lawyer?

    If you act on your contemplations, you DEFINITELY need a lawyer. You must assume that your former employer will go after you (if you have a dime) and you must prepare for that. You'll need to be extra-careful about documenting code-origins. Every act that your company takes probably ought to be vetted. You may want to 'chinese-wall' some code development from others. Lots to think about.

    You are entering the realm of the blood-sucking lawyers, as the man from Jurassic Park said.

  • Re:the short answer (Score:5, Informative)

    by Anonymous Coward on Wednesday November 26, 2008 @11:38AM (#25899911)

    "If they can't take two blocks of code and say "he stole this" they have nothing"

    WRONG.

    REPEAT AFTER ME: NEVER TAKE LEGAL ADVICE FROM SLASHDOT; NEVER TAKE LEGAL ADVICE FROM SLASHDOT

    There are four problem areas that you might face:
    1.) contract law - your non-compete - you will be sued on this as an example to the others
    2.) trademark law - (or more accurately, trade dress - look it up on wikipedia) - if you copy the look and feel of their product, expect to be sued
    3.) copyright law - this is the area that the quoted poster is referring to - you might be ok on this one, although if they can prove similarity you might be screwed (because you sure had access to the code)- I'm not too familiar with copyright law with respect to computer code.
    4.) trade secret law - (again look it up on wikipedia) if they can prove you copied any of their trade secrets with respect to the product you are screwed.
    5.) patents - are their any patents on the software? Do you know that there is or isn't?

    Also remember that even if they sue you and you win, you are still going to be in line to pay an attorney big bucks. So even if you win, you lose. And given the facts, expect to be sued immediately (I would sue you if I was the employer).

    GET A LAWYER IF YOU PLAN ON DOING THIS.... you should not screw around with Slashdot on this one.
    GET A LAWYER
    GET A LAWYER

  • Re:the short hairs. (Score:3, Informative)

    by SanityInAnarchy (655584) <ninja@slaphack.com> on Wednesday November 26, 2008 @11:42AM (#25899961) Journal

    As far as I know, there's no legal requirement to have a lawyer -- you can always represent yourself. There's only a right to legal counsel if you're accused of a crime -- and, I assume, some sort of requirement to represent someone else.

    Even assuming that's not the case, there are always asshats like Jack Thompson.

  • Re:the short answer (Score:3, Informative)

    by plague3106 (71849) on Wednesday November 26, 2008 @11:46AM (#25900013)

    3) Get the ok from your boss before you leave to join a software start up that your friend started. Mention to him that they dont have any product yet but it is a software company. Ask him if that makes it in conflict with the non-compete that you signed when started.

    No, absolutely not. This will invaribly cause your boss to come after you, and it's none of their business what you do after you leave. Under NO circumstances should you ever revel your plans to your soon to be former employer... EVER.

  • Time is money (Score:3, Informative)

    by tepples (727027) <tepples@nOSpAM.gmail.com> on Wednesday November 26, 2008 @11:54AM (#25900119) Homepage Journal
    Bidirectional codes are dangerous, as the erocS cases I mentioned above demonstrate. Some other codes look more useful for ASCII art and aren't dangerous as much as lame, such as U+0B08 ORIYA LETTER II from Oriya [unicode.org], which looks more like the head of a Smurf than a letter to English speakers.

    Is IPA somehow dangerous?

    X-SAMPA is a workaround.

    Cyrillic?

    Yes. Remember the IDN homoglyph attack [wikipedia.org]?

    Or the Euro sign?

    &euro; produces €.

    I get the feeling that the whitelist was put in place by someone who doesn't really know Unicode (and/or didn't want to spend time with it)

    Correct. It's easier to whitelist Latin-1 than to comb the entire Basic Multilingual Plane looking for anything that's not part of a bidirectional or complex script. If something won't increase SourgeForge, Inc.'s ad revenue, it's not worth spending time on.

  • by kriegsman (55737) on Wednesday November 26, 2008 @12:14PM (#25900343) Homepage
    I very strongly recommend investing thirty bucks in a copy of "Legal Guide to Web & Software Development [nolo.com]" from Nolo Press.

    It's not only +1 Informative, +1 Insightful, but also +1 Interesting.

    Also, compared to a lawyer, it is +1 Useful and +1 Cheap, not to mention +1 Fits In A Backpack.

  • Re:the short hairs. (Score:3, Informative)

    by Surt (22457) on Wednesday November 26, 2008 @01:22PM (#25901067) Homepage Journal

    Depends on who you think gets to define what languages exist. By whose authority did you conclude that Chinese != Mandarin? Because my (state-run!) college offered Chinese as a language option. That makes it an official language in my book.

  • Re:the short hairs. (Score:2, Informative)

    by defaria (741527) <Andrew@DeFaria.com> on Wednesday November 26, 2008 @03:52PM (#25902461) Homepage

    There's nothing saying you need to have a lawyer in court to represent you for such a frivolous case. Just represent it yourself at minimal cost.

  • Re:the short answer (Score:3, Informative)

    by lgw (121541) on Wednesday November 26, 2008 @05:50PM (#25903677) Journal

    IANALB, no, not in America. It's gone to court before.

    With a standard contract that "everyone signs", the burden of proof is on you to show that the employer agreed to the change. If the employer initials the change, fo example, you're good.

    But the poster thought he was being clever by making a change without getting explicit agreement. He would lose in court (probably).

    Fundamentally, the written contract is not the agreement that you're bound to. The "meeting of the minds" - the mutual understanding of what is being agreed to - is what's binding. The contract is merely the record of that agreement. Usually, as that's the only evidence of the agreement, the written contract will rule. But there are plenty of exceptions where its understood that one party isn't actually reading the written contract, so anything sneakey in that written contract isn't binding.

The bogosity meter just pegged.

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