Loading...
Answers
MenuIf I created a product and business, and then worked for a new employer and we talk about and demo my invention, is it now my employer's IP?
Answers
Several follow up questions:
1. Do you have any sort of employment agreement now?
2. Did you disclose early on that you were working on this side project?
3. What state are you in?
4. Have you taken steps to protect the proprietary info to date--such as using an NDA?
5. Does anyone else within the company know about this recipe?
6. Is the former employer in the industry to any extent? From your description it sounds like a maybe.
The goal here would be to separate the proprietary details and show that this did not fall within the realm of your employment. I don't think that your employer has enough of a leg to stand on here so even going to court would not be a sure thing for him. However there are some preventive steps you can take now based on answers to the questions above.
Let me know if you would like to chat more,
Thanks,
Madhu
When you registered your business in early 2014, did you also apply for a patent? (LegalZoom's information on patenting recipes: http://info.legalzoom.com/apply-patent-recipe-20489.html )
If you were able to apply for a patent that would definitely work in your favor, but for the sake of your question I'll assume there's no patent...after a few IP disputes of my own (and working with legal startups Lexicata & LawKick), I've learned that when these disputes arise, your first steps (**before saying anything**) should be to:
1) Gather together any & all proof that the intellectual property (recipe) was entirely created by you *prior* to your employment with the former boss in question; and
2) Carefully review every detail of your historical conversations & agreements with said employer.
Once that's done, if court is looking like your future then you should definitely go beyond Clarity and get an in-state attorney's option, for advice specific to your location & scenario (try asking this same question on Avvo.com), but here a few things I've found helpful consider:
- When your former boss paid for ingredients, was it with the company's funds or his own?
- Are there any IP clauses in any documents associated with your former employer? (think beyond contracts - check email signature disclaimers, anything that could be construed in way that would seem you made it the company's product)
- Did you at any point use company property and/or resources to further your product? (e.g. a company-issue laptop)
- Did you mix your business & personal email at all? (for instance did you ever handle any of the company's business from your personal email address, or forward company emails/documents/etc. to your personal email - doing so can sometimes put you at risk of having your personal email inbox subpoenaed if a court believes it's relevant).
Related Questions
-
How do I write an NDA with the right jurisdiction/governing law?
From a legal standpoint: an NDA is an agreement - something contractual, and therefore is not limited (by law) to any specific jurisdiction. So, you can select Delaware or California, or India for that matter. From the business aspect, the best jurisdiction to select would depend on: 1. Jurisdictions that are known to be 'friendly' to your type of business. 2. Jurisdictions in which your lawyer is licensed to practice / the cost of lawyers isn't too expensive. 3. Somewhere not to far from where you are physically located - in case you actually have to go to court. Lastly, best to add a required arbitration or mediation clause if you don't have one. Good luckAssaf Ben-DavidAB
-
How can I become an idea person, as a professional title?
One word: Royalties This means you generate the idea and develop it enough to look interesting to a larger company who would be willing to pay you a royalty for your idea. This happens all the time. Rock stars, authors and scientists routinely license their creative ideas to other companies who pay them a royalty. Anyone can do it. Your business, therefore, would be a think tank. You (and your team, if you have one) would consider the world's problems, see what kinds of companies are trying to solve those problems, and then develop compelling solutions that they can license from you. You have to be able to sell your idea and develop a nice presentation, a little market research and an understanding of basic trademark and patent law. The nice thing about doing this is that if you develop enough cool ideas you will have royalties coming in from a lot of different sources, this creates a stable, passive revenue stream that requires little or no work to maintain. Start in your spare time and plan on the process taking 3-5 years. Set a goal to have a few products in the market that provide enough revenue (royalties) to cover your basic living expenses. Then you can quit your day job and dedicate more time and increase the momentum. A good idea business should have dozens, if not hundreds of license contracts generating royalties. It's possible to pull this off. And it is a fun job (I'm speaking from experience).Mike MoyerMM
-
Do I have to file form 5472 for "additional paid-in capital"?
Yes you should be reporting the capital contributions. Under the old Form 5472 rules, it's true that only items that impacted taxable income would be reportable transactions. So, a capital contribution by you to the corporation would not be reportable, unless the equity contribution was somehow below or above a fair value contribution in exchange for services that you might provide for the corporation - essentially an imputed reportable transactions. When the IRS changed the Form 5472 rules to require non-U.S. owned single member LLC's, they expanded the reportable transaction definition to include virtually everything. The term “transaction” is defined in Treas. Regs. Section 1.482-1(i)(7) to include any sale, assignment, lease, license, loan, advance, contribution or other transfer of any interest in or a right to use any property or money, as well as the performance of any services for the benefit of, or on behalf of, another taxpayer. So, for example, contributions and distributions would be considered reportable transactions with respect to such entities. These amounts can be reported on Lines 12 and 25 with an explanatory footnote that clarities the amounts are capital contributions and not amounts that impact taxable income.Jason KnottJK
-
Do entrepreneurs need to do illegal things and break the law? When is breaking the law justified?
More of a political answer than anything to be honest. Laws are created by politicians, politicians make their decisions based on lobbyists & public opinion. Lobbyists and public opinion can both be bought. One person only has one vote, a company can persuade millions of votes. Imagine what would happen if Facebook (or Reddit) put a tiny icon that say "Vote ________ for president", how many people that would influence to vote. Businesses are what influence & create laws in the end. Even your personal opinions come from businesses. Is it something you read in a book? Author makes money, textbook makes money. Read it on the internet? The website makes money. Learned it in school? University makes money, professor makes money. A business that is breaking a law is really just fighting the status quo of the established businesses, which might be why often new businesses think or might assume they need to do something illegal to get ahead. While established businesses such as Comcast or Facebook can break laws and it be "legal" (because they do it in the right way of course). But no, entrepreneurs don't need to do illegal things and break the law. Pick a business model, any business model, and then do it better.Koby ConradKC
-
If I come up with a coaching methodology / formula, is it protected under Copyright?
(I'm a small biz attorney who helps people with copyright, trademark, and other IP law, and I'm answering per U.S. law.) As soon as you take your idea and put it into a tangible format (write it down, create an infographic, record a video), then that writing/infographic/video is automatically protected by copyright law. You can record the copyright on it too, which makes it easier to protect and get damages from other people taking it. But the formula itself would be probably protected under trade secret law or patent law. Patent law obviously takes a bit more effort, because you have to apply for the patent and get your application examined by the USPTO, which takes years and $$$. Keeping it protected under trade secret law means you have to make an effort to keep it secret (which may not work if you are disclosing it as part of your marketing efforts), such as keeping it confidential and requiring NDAs. As someone else said, the other terms you use might be protected under trademark law. If a member of the public would use those terms to link your products/services with the source of the product/service (aka, your company), then they could be trademark-able. There are some state law protections for trademarks, and you can also file to register the trademark with the USPTO and get more protection. Hope that gets your started!Elizabeth Potts WeinsteinEP
the startups.com platform
Copyright © 2025 Startups.com. All rights reserved.
