A good friend and I had an idea for a software/mobile device related business last year, but haven't had the time to develop it yet.
He is currently taking a software engineering class at his University, which the main focus is a group project. He decided to do a smaller but closely related idea for his group project in this class. He is the project leader for a group of 4-6 students.
Can we still develop this idea into a business, without having an liability towards his project group members? How can we protect ourselves in the outset so avoid some sort of legit litigation in the future if our idea is successful?
There's no good answer. It would depend on his arrangement with the university (sometimes, they claim rights in student inventions done with university equipment), the contributions of the other students (since they may have rights) and the connection between the work done in the class and the business.
Those are all things that your lawyer will ask you about when you go ask him this question.
In general, though, what can you do? Separate the work of the class from that of the business, buy out any rights that the other students have (or just get them to turn them over) and get the university's OK. And document everything.
You need suitable agreements (protecting your rights and limiting your liability) between you and your friend; the two of you and the other students; and the two of you and the University.
Unfortunately, you are asking this question a bit late in the game (the university and the other students apparently already are working on the idea), and it is not clear whether you would be able to negotiate appropriate agreements with the other students and the University in any event.
Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.