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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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  • You can do IT! (Score:1, Interesting)

    by fibrewire (1132953) on Wednesday November 26, 2008 @03:32AM (#25897139)
    well, if the software is worth while and you don't mind releasing it under the GNU GPL then i don't see why you can't. You wouldn't be competing with the project because you wouldn't be making money from the code. You CAN make money by supporting the software, also in California non competes and the like have been ruled "NO GOOD" in this state (search SLASHDOT 3 days ago) and you would have the benefit of IBM's financial backing of legal services if anyone tries to quash your great idea. Just don't make bingo software, i HATE bingo software...
  • Re:Tread carefully (Score:1, Interesting)

    by AeiwiMaster (20560) on Wednesday November 26, 2008 @03:32AM (#25897141)

    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.

    How Software Companies Die
    http://crowdnews.eu/stories/view/38/ [crowdnews.eu]

  • A better way... (Score:1, Interesting)

    by Anonymous Coward on Wednesday November 26, 2008 @03:45AM (#25897193)

    There is no chance you are going to get away with this.

    Your company will not sit by idle and let you create a directly competing product. There are many kinds of intellectual property which the company owns around your product and which you may find yourself infringing - it is not just the code you are writing. You can be sure that the lawyers will find many different ways of going after you.

    Any lawsuit brought against you will be a strain on your startup budget and keep away your prospective customers.

    Don't underestimate the 'sales drones'. You will have to sell your software, too, and will quickly find that you will have to act like them. Are you sure that you will be able to do that?

    Are you sure that your new version will be commercially viable? Do have a reliable estimate on your development costs and timetable? How can you be sure that you will be profitable (e.g. do you already have a customer who will pay for your development?). With software it is very easy to develop unrealistic business plans that look great on paper, but never even come close to the expected the number of paying customers.

    As tech people, we always assume that the most important work that goes into a software product is the code. But that is wrong. The most important work is sales! Whether you like it or not (..I am not a sales guy and I don't like it either, but this is the way it works). Just look at how many horrible products are out there that sell well.

    If you think you can do better, then there is another way: Ask your company for their support. It does not sound as if the current product were a cash-cow. So if you can come up with a realistic business plan which has a good rate of return (otherwise you would not be thinking of starting your own version, right?) then propose a joint-venture or buyout. I am sure your company would be delighted to have you work for free instead of having to pay the development team. Give them a minority stake, ask them for seed funding (continue to have them pay your salary for a time...), and then get started.

    You just need to be careful in orchestrating this - your immediate superiors may be the biggest roadblocks. Finance guys further up are less emotional. They will calculate this through and if the numbers look good, they will back you.

    But ultimately you assume that you know better than they how to make money with the product. So you need to convince them that they have a problem without telling them all your solutions in advance.

    Enough of the rambling... good luck!

  • by PinkyDead (862370) on Wednesday November 26, 2008 @04:01AM (#25897247) Journal

    Or do something related, that (initially) supports the existing product, making it faster or better? This will allow you to exploit the knowledge you already have and use your current employer as a reference/sales source.

    Most start-ups I've ever worked for spawned from another (bloated) company in a symbiotic, but evolved to outstrip them.

    (And you and I both know that on your computer somewhere are a load of tools that only you know about which could easily be suborned to your needs.)

  • by Chrisq (894406) on Wednesday November 26, 2008 @04:04AM (#25897253)
    A friend of mine did this about 10 years ago. The original company accused them of theft of sourcecode (which they hadn't done) and made criminal charges as well as suing them. Fortunately one of the new company's founders was a Lay Magistrate. He got the court fatstracked to court and swore under oath that they did not have any source code, which was enough for another judge to throw the case out!

    They also brought a civil case for stealing intellectual property, but most of what they included was standard (It was Travel Agent's software), so they put together a brochure of various other solutions and shown that there was nothing that their "old" company had uniquely developed.

    The old company then made a big mistake. They wrote to all their clients telling them not to deal with the company my friend and colleagues had set up because their software was "no good" and "ripped off", and that they would not support anyone who even looked at the software. They had 50 enquiries that week, and went from having three large customers (which covered costs and paid a quarter of a years salaries) to 20 in six months (which meant that they were pretty well off)!
  • by halo_2_rocks (805685) on Wednesday November 26, 2008 @04:27AM (#25897365)
    I have "re-written" a few programs in my time. Here is what you need to do: 1) Plan on being sued. You can't avoid it (the big guys use it to keep you from competing). 2) Work around the system. To sue someone, you actually need someone to serve papers to. This the first thing to attack. Form two S-Corps. One where you transfer all the money (off shore account is a must) and one with all the debts and oh yeah - your public face/address/etc to the world. 3) Use a post office drop box. To be served papers, they have to hand you the documents. Kind of hard to hand them to you if they can't meet you. 4) Having been "served" (which can take them months - talk about some pissed off lawyers). It is time for the next step. Offer them a couple hundred bucks to buzz off (if they have sued you before, they'll take the money - if not, time for a lesson). 5) Don't send anyone to represent the S-Corp in court. Ignore them. 5) They win a default judgement. Yawn. Ignore them. 6) The lawyers involve the county sherrif. He'll serve you notice they are seizing the property (bank accounts, property, etc) held by your debt laden, assetless S-corp (depending on where it is served you have a number of days to vacate etc). Yawn. Great. Give it to them because it is worthless. 7) Form a new S-corp, give load it with debts and your new public face and off you go again. Rinse and repeat as often as necessary. Oh yeah, one more thing - don't forget to pay your S-Corp taxes. IRS can come after your personally for back taxes. But, civil lawsuits can't.
  • by Firehed (942385) on Wednesday November 26, 2008 @05:29AM (#25897633) Homepage

    In fact having worked in software sales, I'd say that support is probably the determining factor in most sales unless you have a very specialized product. And if that's the case, you're going to need to outstrip your employer's old code by miles since they're the established player in the vertical.

    As a developer, you may know that the code sucks. That it just somehow compiles. That it really should be subjected to a rewrite from scratch. That "WTF?!" is present in five more comments than is healthy. And you're probably correct. However, when it comes to actually making money from it, you just need to be better than your competition.

    I've fought with coders and with salespeople at the same company, often times over the same issue (it's a hazard of being a sales engineer - you often end up as a moderator). Neither would exist without the other, so stop blaming each other and realize that both of your problems are management's fault :)

    Not only am INAL, but I'm in a similar position as the original poster. I'm partly thinking that since I have personal projects that could benefit from the software, I'll keep it to myself until any non-compete expires (even if it's not enforceable) just to stay on the safe side. Which means that development is well underway, for me. It may never make it into the public. It may go out commercially. It may go out as open-source, with some sort of hosting(SAAS)/support-driven business model - right now, the most likely. But until you know that there's no valid case should your ex-employer sue you, I'd keep it as a personal project.

  • by halo_2_rocks (805685) on Wednesday November 26, 2008 @05:47AM (#25897725)
    That is where the off-shore account comes into play (not that I've ever needed that and bankrupted 5 companies as a result of being sued). Hiding assets and finding them can be a game all by itself. I do the same thing with my personal assets. The world is a big place (I recommend a well-known carribean country myself) and most lawyers don't have the resources to be chasing you all over the place to get at the real money. Worst case - cash out your holdings (bear bonds is a good vehicle), bankrupt the holding corporation, and start over (and put the bear bonds in a safe deposit box). On paper, you can be personally bankrupt, and all your corporations can be bankrupt and work on a cash basis for a while till the vultures lose interest. What the lawyers are trying to do is run you out of business. Give them what they want (or seem to). Time is on your side. Lawyers aren't cheap and the opposition will eventualy run out of cash or give up (or when they seem to win, they won't have the time to sit around and watch what you do afterwards). :)
  • Re:the short answer (Score:3, Interesting)

    by Tony Hoyle (11698) * <tmh@nodomain.org> on Wednesday November 26, 2008 @06:14AM (#25897873) Homepage

    Doesn't stop them trying.

    A contract I once signed originally had one... they tried to cover work I did at home as well, and I just said I wasn't going to sign whilst that clause was in. When they refused I merely crossed it out before signing. They didn't bother to read what they were countersigning.. their loss.

    This current job doesn't have one - in fact almost everything I write is under dual copyright so I can take the code and use it myself if we part company.

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

    by saider (177166) on Wednesday November 26, 2008 @06:47AM (#25898069)

    Some non-competes are enforceable. My father-in-law worked for a wireless company and when they let him go they paid him 2/3rds of his salary to not work for a year. This was a contract, and since he was being compensated, it was enforceable. I think he was also able to collect unemployment during that time as well because he was being paid for past work, not current or future work.

    The moral of the story is that if anyone asks you to sign a non-compete agreement, ask for money. The HR folks will then usually file the NCA in the circular bin. I know the two times I've brought it up, I have been hired without signing it.

  • Mod parent up (Score:3, Interesting)

    by davide marney (231845) <davide.marney@NOSpAm.netmedia.org> on Wednesday November 26, 2008 @07:50AM (#25898373) Journal

    At last, a sensible bit of advice! Talk to your employer first.

    First, there's no way to avoid legal entanglements if you take ANYTHING from your employer that they have paid you to produce. The only clean, legal route you have to code happiness is through your employer.

    Second, actually selling a successful product requires at least three legs on the stool: development, sales, and corporate support (finance, IT, HR, and executive). OK, you've got one leg -- who's going to provide the rest?

    Lastly, just trying to get your current employer to let you set up shop internally can provoke changes for the better. Your employer might wake up and ask themselves whey those geeks from development are clamoring for a shot at selling a new product.

  • by tomhudson (43916) <barbara.hudson@nOSpaM.barbara-hudson.com> on Wednesday November 26, 2008 @07:59AM (#25898445) Journal

    Overhyped by sales drones? Well, even if you don't, at least your colleagues believe in your product.

    Their paycheck depends on them being "true believers". Can you imagine if they went around to customers and said "We want to sell you this really crappy, sucky product? How sucky is it? It will give you so many headaches you'll think Microsoft wrote it ..."

    It's very hard to get someone to believe something that goes against their perceived financial interests - which is why management frequently doesn't listen to the alarm bells. A good example was google's searchwiki - anyone could have told them it was a bad idea, a spamtrap, that people who are searching for something don't want to waste their time rating search results - that search is just a waypoint on a users' trip on the net, not a final destination.

  • And tell her what? (Score:3, Interesting)

    by tepples (727027) <tepples@[ ]il.com ['gma' in gap]> on Wednesday November 26, 2008 @09:01AM (#25898949) Homepage Journal

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

    If the answer to an Ask Slashdot is "ask a lawyer", the question was really "what should I tell my lawyer?".

  • by I cant believe its n (1103137) on Wednesday November 26, 2008 @09:05AM (#25898979) Journal
    This entire discussion sounds so much like the ones on self censorship with regards to the government/other evil entity listening in on our conversations. You change your behaviour on the mere suspicion that something could happend, which is a really bad thing. That way the red-team wins on walk-over.

    In this specific case, people fail to pursue the american dream, of creating value for themselves and society on the basis that a company they used to work for might go after them in court.

    Does anyone know if/how often lawsuits like this actually does happend to real people? What US states enforce non-compete clauses without any compensation to the signee?
  • Re:the short hairs. (Score:5, Interesting)

    by Registered Coward v2 (447531) on Wednesday November 26, 2008 @09:17AM (#25899091)

    "Anyone in the USA can be sued for anything in this day and age."

    Fixed that for you

    "Anyone can be sued in the USA for anything in this day and age."

    Fixed that for you

  • Open source it? (Score:5, Interesting)

    by edmicman (830206) on Wednesday November 26, 2008 @09:37AM (#25899305) Homepage Journal
    It's uncanny....I could have written this exact same post....sigh....

    My company was acquired by a much larger company, and "they" chose to consolidate our platforms onto a product offering that I (and my coworkers) feel is a much lesser product. We offer a hosted ASP solution with accompanying business consulting. From a tech standpoint (myself being the primary developer on our software), the platform we are moving to is horrible, crappily written, aging, and falling apart on itself.

    I have had the same thoughts about wanting to do it myself, rewriting from scratch, but there would be obvious similarities in part because I wrote much of our own code, and because there are only certain ways you can do things in our business. On top of all that, we had to sign non-compete employee agreements when we "hired" onto the company that bought us. I wasn't (am not still) in a position to quit my job, and at that time I didn't know what garbage this company was about. Unfortunately, it seems I'm also in a state that *does* enforce non-competes.

    My thought now, is to write competing software, and open source it as a project on sourceforge. The way I read it, the noncompete keeps me from working for a competitor or starting my own competing business, or somehow profiting from competition, for a period of one year. But if I write software that does what we do, better, and allow someone else to use it and base a business on it, that would at least be something. Plus, maybe some other opportunity will come along, I'll go there for a year, and then could really focus on creating a competing startup after that. The sad thing is, this company has bought the top 3 competitors in our business niche within a year. This foolish "integration" for has effectively stymied any progress for our market for at least 2 years, without any signs form management that they want to actually create any new or innovative ideas. And we're consolidating on technology from 1996 - for a web-based ASP business!!

    Honestly, I have no interest in the business - I enjoy the people I work with, and had pride in providing what I thought was a great product. Now I am embarrassed to be associated with the product offerings we have. I don't know if spite alone is motivation enough to create and maintain a new software project. But I think publishing an open source php/mysql platform solution that basically does what our software does is the only way.
  • by Asic Eng (193332) on Wednesday November 26, 2008 @09:57AM (#25899523)
    What advantages will your product give the customer, making it easier to sell and possibly making the customers switch?

    I think you make very valid points. However there is an advantage good programmers can have, even over a well-established company: They may be able to complete the project. The waste and the insanity of IT companies does not just exist in Dilbert cartoons, it's real.

    That's not to say that it's as easy to manage people as it is to complain about management, or that you can run a company without sales people etc. Still there is an opportunity to do better and small, new companies have a chance against a big moloch which is usually bogged down by infighting and incompetence.

  • This happened to me. (Score:1, Interesting)

    by Anonymous Coward on Wednesday November 26, 2008 @01:04PM (#25901451)

    Years ago I worked for Cadence Design Systems. The project I hired onto had spent over a year trying to finish a product. Some of the developers stole the source code, formed their own company and brought the product to market before Cadence did, even though Cadence had a 15 month head start.

    Then they began selling their product, and used the money to buy two other software startups. When they got sued and found guilty of stealing source code, they stopped selling their version and paid a big fine, and still had enough left over to have a successful company.

    My part? I was hired to close the barn door after the cow had left.

  • by BlairAtRice (886637) on Wednesday November 26, 2008 @02:35PM (#25902279) Homepage
    Knowing what your current company is not doing is also a trade secret. If you gain an advantage because you know of things they are not doing or what the limitations of their code is then you are also liable for IP infringement as long as they can prove the only way you could know this is through having seen the actual source code.
  • Re:Sad to see this (Score:3, Interesting)

    by doom (14564) <doom@kzsu.stanford.edu> on Wednesday November 26, 2008 @03:57PM (#25903119) Homepage Journal

    I perceive (and am gratified) by the "rightness" in what you are saying. These people really do propose to screw their former employer. If this were a world with reciprocal conventions of honor, I would agree with you entirely and call them treacherous scumbags.

    Once upon a time, Mitch Kapor was working for Visicalc -- he couldn't get management interested in his ideas for integrating graphics with the spreadsheet, and so he gave up an left to found Lotus 1-2-3, which became one of the great sucesses in the software world -- it's the product that Microsoft imitated to create Excel.

    I submit that this kind of "fork" of a project is one of the ways that progress happens, it's one of the checks on the stupidty of management. Someone engaging in this sort of fork is hardly traveling an easy path, this isn't a decision anyone would make lightly. "Stealing" an idea is the easy part. The hard parts are getting the code written and getting the product marketed.

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