Legal Question in Business Law in California

we co-invented an idea, now we might break up...

My partner and I came up with a good idea months ago. We wrote down this idea in a notebook and each gave signature. Subsequently we formed a co-partership company. I am in charge technical area and is working on a patent application(just started and not filed yet). My business partner is in charge of looking for funding, but he performed very poorly.

There's a chance that we might break up. I am thinking about finding a new partner and forming a new C-corporation. I will allow my current partner to have some shares in this new company, say 10%.

However, I worry about these issues:

1. My partner is not satisfied with 10%; he implied that he want equal number of shares as I do(thought I have to work hard and he doesn't even need to work).

2. I haven't filed the patent yet. If I only write my name on the patent application, will there be any problem? I am the only one to write this patent(detail implementation of the idea), and my partner doesn't even understand engineering implementations.

3. The worst case: can my partner sue me for stealing idea from our co-partership

company?

Thank you very much.


Asked on 5/04/03, 4:38 pm

2 Answers from Attorneys
Jason Hsu Una Law Corporation

Re: we co-invented an idea, now we might break up...

Before anybody could answer your questions, they would need to go through the facts of your agreement. It seems that you did not enter into a detailed partnership agreement.

From what you are saying, it appears to me that you should have counsel to formalize your current agreement and/or to work out issues of ambiguity with respect to your equity share, respective roles, and contributions.

We can likely assist you with structuring your new C-Corp; however, we need to become more familiar with your specific circumstances. If you are in the metropolital areas of northern or southern California, please contact us at www.unalaw.com and somebody will assist you as soon as possible.

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Answered on 5/05/03, 2:41 am
Frederick Choi Law Offices of Frederick H. Choi

Re: we co-invented an idea, now we might break up...

Your question is somewhat complex and contains a few issues. However, one important issue that I would comment on is that the patent pending or the original idea may be an asset of the partnership. If this is so, your partner is entitled to an equal share or valuation if the partnership is dissolved. At any rate, I believe that you should confer with an attorney who can review the partnership agreement, if any and provide you with more specific help. If you have any further questions, please feel free to contact our office.

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Answered on 5/05/03, 12:57 pm


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