IP Ownership Dispute


1

My partner and I are having a dispute. I wanted to know who owns the code in a company with one technical cofounder (me) who has written the entire code. I was the one who came up the idea and started working on the product. About 5 percent was written before the company was formed by me and him and I wrote 95 percent of code after we formed a delaware LLC and put in an operating agreement. I want to part ways now after about a year because I have noticed my other partner has not been fully committed to the company to help with sales and funding which is his role and he is spending too much time on his other businesses. He claims the code is owned by the company but I have claimed this is owned by me. I haven't received any compensation for writing the code and it was written on my personal laptop. The svn repository is a free server under my account. I may or may not have mentioned in some email that the company owns the code (not 100 percent sure). There is nothing mentioned in the operating agreement about what happens to the software code/ip or who owns it.

Co-Founder Copyright Intellectual Property

asked Aug 19 '11 at 03:03
Blank
Kap
6 points
  • "May or may not have" reads awfully like "I probably did, but he can't prove it" – Tim J 9 years ago

3 Answers


4

Instead of worrying about who owns the code, have you thought about just firing him for not doing his agreed upon job.

If not, I'm pretty sure you'll be stuck with 95% of the code being owned by the company. Will the code still work without the other 5%? That could also be an angle for further negotiating if there wasn't an agreement to buy that part of the code / who owned that part of the code.

The last option is to use this as a learning opportunity. If he's not selling anything the company won't really amount to much, just let it sit there and rot (since you don't seem to have performance clauses) while you move on to another projects... You're still an owner after all.

answered Aug 19 '11 at 09:38
Blank
Mike
310 points

1

I realize you want the code/IP to be yours alone. The simple truth is that unless there was an operating agreement of what happens during a dissolution of the company the code is essentially owned by the company. Of course, there is leverage in understanding that. It means it is not solely your partners either. It is this entity known as 'the company', and unless you would enjoy heading to the courts to sort it out, step back and re-evaluate what can be done to solve the issues at hand. Your language almost seems a bit irate and irritated by the entire situation, which I am sure may be well warranted, however the solution does not lay withing an overwhelming feeling of being owed for all the effort you have put into the project, and the seeming very little effort that has been put into it on the other end.

My brother is in a sales situation where he needs to meet a measly 2 sales a week. Yet he has not sold anything in two weeks or more. He made a goal to be told no by 40 people a day. I told him to re-evaluate his goals and instead of being told no 40 times a day, make one sale in every 100 people he talked to.

  1. Reevaluate what each partner is responsible for.
  2. Put it on paper, written contract is gold.
  3. Use a time & project management system in combination with more paperwork to track what each partner is doing, when they did it, who they are talking to, leads they are following, when they where followed, code that has been produced, tests that need run, quality assurance that needs reviewed, etc.
  4. Put it on paper, and keep it on paper. From the sounds of it your biggest issue is the feeling that you have put more time, energy and effort into the project than he has.
  5. Sign an agreement of what is going to happen during a dissolution of the company. Who gets what essentially, I've always understood a business partnership is like marrying someone. Sometimes much more serious than a marriage, it's your livelihood, dreams, and passion.
  6. Hold each other to the contracts and what each person said they would/wouldn't do.

Cause and effect, what happens if one partner isn't meeting their metrics? I don't know what the specific laws of your local are, however I am pretty sure based on what you have said thus far, and you will need to talk to a lawyer, that lawyers will need to sort out who own's the IP on the code if it continues the way it sounds it has been.

If you would like to continue with wanting to walk away with the code, talk to a lawyer about the specific legalities of what needs to happen.

answered Sep 16 '11 at 17:49
Blank
Angel Brighteyes
131 points

0

As far as my understanding goes, you can't claim IP ownership just because you wrote entire (or 95% or whatever) code. It also equally depends on what was the role of the other person, was the project planned by him? Did he describe you the architecture which you just implemented?

I can relate this situation a bit with my own situation (though I'm not in any dispute!). I'm working on a project as a developer with someone who's mentoring/guiding/helping me but 100% code is being developed by me. Do I own the code? Not at all. (Reason: his role!)
So IMHO, in your case it all depends on your partner's role.

Since, you never clarified it in any legal documents beforehand, so I'd recommend you to also think about it from your partner's viewpoint, if you were him, what's it that would make you think that you(or company) can claim IP ownership.

answered Aug 19 '11 at 04:07
Blank
Atul Goyal
496 points
  • The idea to build it was mine and the entire architectural/technical decision was mine. His role was to help sell the product and help get funding. He hasn't tried enough to do either and he is working on his other businesses. – Kap 9 years ago
  • If you can show that he was working on something else then the common interest argument of a joint effort probably won't stand up in his favor. Just take the IP then and maybe offer him a nominal amount with a signed document stating that he gives up rights to the IP. Or perhaps jsut say that if it is ever profitable he can get 2% of gross revenue for a year. And then it is done. But come up with some arrangement. – Tim J 9 years ago

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Co-Founder Copyright Intellectual Property