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I am a software engineer who got an idea, and developed alone an integrated ERP software solution over the past 2 years. I got the idea and coded much of the software in my personal time, utilizing my own resources, but also as intern/employee at small wholesale retailer (company A). I had a verbal agreement with the company that I could keep the IP rights to the code and the company would have the "shop rights" to use "a copy" of the software without restrictions. Part of this agreement was that I was heavily underpaid to keep the rights.

Recently things started to take a down turn in the company A as the company grew fairly large and new head management was formed, also new partners were brought in. The original owners distanced themselves from the business, and the new "greedy" group indicated that they want to claim the IP rights to my software, offering me a contract that would split the IP ownership into 50% co-ownership, completely disregarding the initial verbal agreements.

As of now there was no single written job description and agreement/contract/policy that I signed with the company A, I signed only I-9 and W-4 forms. I now have an opportunity to leave the company A and form a new business with 2 partners (Company B), obviously using the software as the primary tool. There would be no direct conflict of interest as the company A sells wholesale goods.

My core question is: "Who owns the code without contract? Me or the company A? (in FL, US)"

Detailed questions:

  1. I am familiar with the "shop rights", I don't have any problem leaving a copy of the code in the company for them to use/enhance to run their wholesale business. What worries me, Can the company A make any legal claims to the software/code/IP and potential derived profits/interests after I leave and form a company B?
  2. Can applying for a copyright of the code at http://www.copyright.gov in my name prevent any legal disputes in the future? Can I use it as evidence for legal defense? Could adding a note specifying the company A as exclusive license holder clarify the arrangements?
  3. If I leave and the company A sues me, what evidence would they use against me? On what basis would the sue since their business is in completely different industry than software (wholesale goods). Every single source file was created/stored on my personal computer with proper documentation including a copyright notice with my credentials (name/email/addres/phone). It's also worth noting that I develop significant part of the software prior to my involvement with the company A as student.
  4. If I am forced to sign a contract and the company A doesn't honor the verbal agreement, making claims towards the ownership, what can I do settle the matter legally? I like to avoid legal process altogether as my budget for court battles is extremely limited at the moment.
  5. Would altering the code beyond recognition and using it for the company B prevent the company A make any copyright claims?

My common sense tells me that what I developed is by default mine in terms of IP, unless there is a signed legal agreement stating otherwise. But looking online it may be completely backwards, this really worries me.

I understand that this is not legal advice, and I know to get the ultimate answer I need to hire a lawyer. I am only hoping to get some valuable input/experience/advice/opinion from those who were in similar situation or are familiar with the topic.

Thank you,

PT

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My suggestion: Talk to a lawyer. –  Lattyware Oct 27 '12 at 20:19
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I agree, your case is quite specific and also depends heavily on your local jurisdiction and the details of your (written) contract. While verbal agreement theoretically is binding in many jurisdictions, in practice it is difficult to enforce, for obvious reasons. –  Goran Jovic Oct 27 '12 at 20:38
    
@GoranJovic Thank you for your comment. There is no written contract nor any other document I signed, everything was agreed upon verbally. It was a big mistake on my part that I didn't request the written agreement in the first place - I was trusting and naive, lesson learned –  P T Oct 27 '12 at 20:54
    
@PT: I meant your employment contract. Details depend on that contract and the IP & employment laws in your country. –  Goran Jovic Oct 27 '12 at 20:57
    
@GoranJovic sorry I wasn't clear enough. There is no employment contract either –  P T Oct 27 '12 at 21:12
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closed as off topic by Blrfl, maple_shaft Oct 27 '12 at 22:22

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2 Answers

You may want to take a look at Justmed, Inc. v. Byce, in which the court determined that Justmed owned the work Byce did for them, since it was determined that he was an employee of Justmed and the work fell under the work for hire laws, essentially. The key is to prove that you aren't in fact an employee of said company, but based on the information you provided, it sounds like it'd be hard to prove otherwise.

But if this is a real concern for you, don't listen to me. Get a lawyer.

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Thank for your answer and the link. I think challenging the employment itself would be difficult as I was drawing salary, despite the salary was less than 50% of prevailing wage for such position. On the other hand the purpose of my employment would be questionable, I came to the company as an intern to maintain their online shopping cart - this was documented at my university. There was no other job description assignment that would determine that I had to develop the software for them. –  P T Oct 27 '12 at 21:22
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  1. Talk to a lawyer.
  2. Watch "Fuck You, Pay Me."
  3. Be (possibly) Happier and (definitely) Wiser.
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Thank you for this! Lesson learned, no doubt. –  P T Oct 27 '12 at 20:45
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