Legal Question in Intellectual Property in California

Ownership of a business idea

I have been working for a company for a year, and proposed an idea for a new (internet) product when I first started. Despite some initial enthusiasm, my boss eventually shelved the idea. I brought it up several more times, and even did a very small market test that said it would be successful, but she has still shelved the idea for various reasons with no clear intent about when/if we would ever implement it. Now, a year later, I brought up the idea with a friend, who is excited about it, and wants us to make this our ''weekend project.'' My question is does my current employer own this idea, because it was developed while I worked at her company? I don't think it's a patentable feature, but it hasn't been brought to market by anyone yet and there could be considerable ''first move advantage''. I'm mostly worried about being sued if the weekend project becomes successful and my employer wants to claim rights to it.

We operate in California but we are technically a Delaware corporation, if that matters.


Asked on 10/19/07, 2:17 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Ownership of a business idea

Generally speaking, there is no property right in an idea. Abstract notions are not trade secrets, nor are they patentable or otherwise subject to protection. If you were being paid to create ideas, and you conceived this idea while on the employer's time, you perhaps could be sued successfully for misuse of the time as a breach of your employment agreement, but you wouldn't be liable for misappropriating the value of the idea itself.

Another exception under which a suit for damages for misappropriation of a business idea might succeed is when the person with the idea owes a special or fiduciary duty to the employing firm because of being its director, substantial owner, or high-ranking officer. Such persons may owe a duty to the firm and its other owners to remain loyal to it. This would not apply to rank-and-file employees.

I can't say your employer wouldn't sue you - companies sometimes sue departed ex-employees who start competing businesses or use ideas they developed while employed - but the main purpose of such suits is usually to threaten and harass. The law in California and many other states favors competition and entrepreneurship, and such suits, even to enforce non-compete agreements, are by and large unsuccessful.

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Answered on 10/19/07, 11:11 am


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