I recently worked at a start-up and I signed NDA with them, they had an idea and they patent the idea and the status of that patent is on pending, also they are failing in business; however, now I want to start my own start-up and the problem is there is almost %80 similarity between my idea and theirs. I want to know if I continue and I succeed, can they claim my codes and algorithms as their own, even though I am not using any code which I implemented for them. I am just worried about NDA I signed and the pending patent. Please enlighten me on all aspects I should know.
Answered on: 7/06/13, 9:35 pm by Bryan Whipple
Here's a partial, somewhat speculative answer to your question.
First, your use of the term "implemented" suggests that, while perhaps not implemented, that the codes and algorithms were created while you were in the now-failing firm's employ. If so, there is a strong argument that they are that employer's intellectual property. Even small tweaking and fine tuning, post-employment, wouldn't change that.
The next issue you have to consider and weigh is the probability of suit. There is a high degree of litigiousness in industries and situations such as you mention, and even though you might prevail against your former employer in a trade-secret or patent or similar suit, the defense costs could eat you alive. Even though the company is failing, this doesn't mean it won't have wealthy backers or successors who'll be picking over its bones for anything of salvageable value. They might sue you for ,misappropriation of trade secrets or patent infringement.
A lot may depend upon very fact-specific and personality-specific matters that anyone answering a LawGuru question cannot even make guesses about. Someone at the old company may decide to go after you. Or, cooler heads may prevail, and they go home and lick their wounds. I suggest having a consultation with at least two independent business or I-P attorneys before rolling the dice.
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Bryan R. R. Whipple, Attorney at Law P O Box 318 Tomales, CA 94971-0318► Other answers from this attorney