Legal Question in Intellectual Property in California

Hi! I am looking to partner up with a techy for purposes of forming a web based company. I will handle the business side of things. I have the idea. I want to be in charge of how the website will appear, and function. And I have a marketing strategy. What I don't have is the tech skills. Thus I will be needing a code monkey to do handle the software engineering. Essentially, I will be the CEO, and whomever I partner up with will be the CTO. A two person operation, initially, until, should we be so fortunate, it takes off and then obviously we'd bring more people aboard.

There will be no costs initially---we will only be investing our time, working out of the proverbial garage.

How can I ensure that he doesn't steal this idea and leave me in the dust? I am vulnerable once I tell a techy of my idea. If s/he likes it, s/he can run off and do all the engineering his or herself. So that's one concern. The other is, even if s/he doesn't run off, how do we divide up the company. We can verbally agree to a 50/50 at the onset of this project, but how can I make this stand up in a court of law should my partner decide to break off at some point?

Should the business plan take off, I'd like to prevent a fiasco such as the Facebook one, i.e. Zuckerberg v. The Winklevoss twins.

I'm sure there are a ton of other legal issues. Basically, what do I need to do to cover my behind?

Thank you very much,

James


Asked on 6/17/14, 5:39 am

1 Answer from Attorneys
Jim Betinol Withrow and Betinol Law

You will need a number of items that is beyond the scope of this website, so I would recommend that you consult with an attorney. To start, you will need to determine the best business formation for you company, taking into consideration the setup and maintenance cost. Additionally, you will need to have an NDA and/or Idea Agreement between the parties to protect your ideas around the technology being development.

An alternative would be to bring in the software engineer as an employee or independent contract to your company, which would reduce the issue of having to deal with a second business owner. However, you will need to have a strong employment or independent contractor agreement that specifically address ownership of the software development.

Feel free to contact me or contact an attorney in your area for further consultation.

Best,

Jim

([email protected])

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Answered on 7/17/14, 1:06 pm


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