Legal Question in Intellectual Property in California

Re: Starting a business while working for another company

There's more than one issue here.

The first issue is the ethical and legal propriety of moonlighting. If you plan, start and run your business on your own time, this is probaly not an issue. However, if you spend time working on your business during time the employer is paying you to devote to its business, you have problems. Further, even with respect to using your own (off duty) time to run another business, the employer may have policies affecting this, or it might impair you chances for promotion if they know your attention is divided.

Next, there is the issue of whether your providing the service violates any claim or right the employer has to the ssame or similar service it is using internally. Evaluation of this possible problem area requires you to figure out whether the process involves or relies upon any patent, trade secret or similar right that the employer could assert is theirs. If the process or service is not based upon secret or specialized know-how and does not depend upon a patent or similar right held by the employer or licensed to it), then the chances are the employer could not assert a claim against you for infringing a right it doesn't hold.

Finally, California law encourages new business, competition and freedom of occupational entry and choice. It is very difficult for an ex-employer successfully to assert a complaint for unfair competition or breach of a non-compete covenant against an ex-employee. However, if they find out and don't like what you're doing, an ex-employee is what you'll be. Are you really ready to go it alone with this idea?