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I am currently employed as a director of a UK-based software development company, but am considering setting up a new company for an idea that I conceived recently. My idea is software-based but for a completely different business area to that of my current company. For the past few months I have been exploring the idea in my own time (evenings, weekends and holidays) using my own hardware and my own software.

My current company's board has stated that they consider this idea to be their property and have threatened to take legal action to enforce this. I disagree with their claim as I developed it in my own time and its business- and technology-areas are completely different from what we currently do. I can also show that the board has known for some time about this, but has never expressed an objection.

I have read snippets from people who suggest that my currently company's claims are unenforceable. Can anyone offer some practical advice or anecdotal evidence that could help me understand where I stand on this issue please?

Thanks,

Robert

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8 Answers

It totally depends on the contract you signed with the company , if they had some weird clause stating anything you build when under contract with them is theirs you are threading rough water else their claim would not have any legal standing.

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Agreed if your contracts states you may not do any work directly or indirectly outside of your current employers scope you may have an issue. However here in the US, do not for sure in UK, there are area known as "right to work" states. In any event your employer which may have more resource than yourself can make your life difficult tying you up with costly litigation knowing they will lose but seeking to break your spirit. Another issue to consider is what if your product does not take off? You will then need to enter the workforce and this could follow you and ultimately hurt your income. Think, ask some experts, think again then proceed. Best of luck

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I know here in the US I've had to sign a contract many times that stated that any ideas or inventions that I created while working for the company would become property of the company. I'm not sure how well they would hold up in court, but I'd imagine that they'd at least have to prove that the idea was inspired by information or knowledge that I gained while working for the employer, which they usually phrase as "Trade Secrets".

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Is your idea a software that can be used in different fields, and the company intends to use it in one and you in another?

I run a software company in Brazil and all employees must agree to the terms of a contract that restrict any code produced in the company to be used for other intrests other than the company's. There is nothing we can do, however, to stop them from making a mashup of different ideas and building their own brand new product outside the company, as long as they don't use any source code.

I guess what you sohould have done was to develop the whole project outside the company and only then present it to it. But since this is no longer an option, can you modify your idea only enough to make the product different from what the company itends to use?

Good luck!

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To clarify: the idea will never be used by my current company. It's completely separate from the markets it is in. – Robert Oct 27 '10 at 14:42

As others have said, the most important thing here is what it says in your contract. However, even if the contract is explicit about owning your ideas, you should probably still get legal advice as often some of the clauses in employment contracts are not actually enforceable. EU law provides for protection against restraint of trade.

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You need to get professional legal advice. Find a local employment solicitor, well worth spending £100 or so to give you confidence when dealing with your board.

Having said that, I believe it depends both on what is in your contract and also on whether a court would deem the contract fair. As I understand it, contract clauses claiming IP to everything you think of are generally considered unfair.

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Very good answer. Really depends - and not only on what is WRITTEN in the contract. You can write down whatever you want. Get legal advice. NOW. – NetTecture Oct 29 '10 at 12:45
Contracts are meant to be broken :) – Frank Oct 30 '10 at 2:23

I could provide an answer if you were in California (you, rather than your employer, would have whatever rights were available for the idea), but I know nothing about UK law.

I haven't seen a lot of UK participants (let alone solicitors) here. You should post your question on LinkedIn - I believe it has many more UK participants.

Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.

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Robert! Tell your company to go @#)*$# themselves. After you build it, launch it, and dont need the job any longer. I have been in multiple long lawsuits, and the bottom line is, at the end nobody wins.

You are better off building it, and selling it back to your old company. Or just build it in the states. Setup a business licsence in a different country like the amsterdam, and put an agent for contact. Outsource your customer service, and colocate your server in france.

My point is, if its a web product then they might not like it, but there is really nothing they can do about it.

The bottom line is non compete, non disclose caluses are seldom enforceable. This is the case in the USA.

Worst case, launch the product in the USA. I am sure we have a bigger market than the UK alone. Get a hosting account here, form an LLC or S-Corp, Get a business mailing address, and a lawyer to serve as your agent for service and you are all set.

Best of luck. I hope that this project does well for you. and once again @#)$@#$) the man for keeping you down!

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Except: If they own it, he will not only loose his job but also the idea and all work done. He will get very low compensation and be burned for years to come - both legally as well as emotionally. BAD advice. – NetTecture Oct 29 '10 at 12:46
I complete disagree on the notion of OWNING an Idea. Its an idea he concieved. It was his mistake to share it with his company. My first job was an intern at a San Jose Startup company (very successful). The founders of the company had created it while working for a very large software company. They built it at nights, 2 of them. I applaud anyone who would start a company on their own. The political thing to do is to keep it a secret until he no longer needs his job. I think if you start a company worrying about lawsuits then you will never get it off the ground. Plus they will not know – Frank Oct 30 '10 at 2:23

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