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Ownership of website / code
Anonymous2 views4 answers
A buddy of mine and I talked about taking a website he had developed and has been making money on for the past six years, teaming up, and doing some re-work. We talked about incorporating at some point. I did a complete site redesign from scratch. He had no involvement in the creation of the new site, as his personal life kept him from doing so. I recently told him that I was not interested in partnering as I was sure I could run the site myself and preferred to keep all revenue. He says that 50% of the code I wrote is his because we had an agreement. We had no verbal or written agreement to being partners, just that we might create a legal partnership in the future. I informed him that I plan to run my own site with the code I wrote. He's threatened to sue me if I do. Does he have a case?
Absent a written agreement - partnership, LLC, corporate or other - a court is very likely to find that the two of you are de facto partners. That means the law would contrue a partnership, and then it would be up to the court to determine percentages of ownership. In the beginning of the post you acknowledge that your buddy developed the site and has been making money, and by the end of the post he seemed to be a deadbeat and you did everything. So, either a court would have to weigh it all out and determine percentages, or you can submit this to a private mediation, which would take less time and money, or the two of you could sit down and try to work out an agreement in acknowledgment of the contributions that both of you have made.
I truly wish you the best.
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This answer is offered for informational purposes only. It is not offered as, and does not constitute, legal advice. Laws vary widely from state to state. You should rely only on the advice given to you during a personal consultation by a local attorney who is thoroughly familiar with state laws and the area of practice in which your concern lies.
You need to take one long step back.
Your friend has run a BUSINESS that uses a website to make money. You and he agreed to partner to create a new website for THAT business. Now you want to take the new website design and the code that you wrote for THAT business and start a competing business. Whether you can do so lawfully or not is the overriding dispute -- not who owns what you created.
You need to speak with an intellectual property attorney licensed to practice in your state. Depending on the facts, you may have created a default partnership [as my colleague notes] which may own the copyright in what you've created. You may also have a duty NOT to compete against the business you were ostensibly working for when creating the new website. Lots to consider.
Yes, he's got a case. Under these facts, I think a court would find that there was an oral partnership agreement for you to re-work this existing, money-making site and "teaming up" to go into business together. You don't state that he wasn't involved in what you creacted, just that he didn't join in its creation, which sounds like you're looking for reasons to exclude him now.
A court would also probably find that the software code was owned by your partnership, even if you authored all of it, since you did this work with the understanding that you'd be teaming up with your buddy, and only after you determined that you didn't need him did you decide that it was all yours.
If this had been a total stranger's website that you copied the idea from and started competing with, it would be different. Here this was someting you created after discussions about teaming up, which changes everything. Presumably he can prove there were meetings and emails and phone calls about how this "teaming up" would work, and that's how he'd prove this partnership and his rights to the partnership assets.
Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.
I agree with my colleagues. I would add the following. You should not assume because you did a lot of the work that this entitles you to either take over the business or to a greater share of the business than your "buddy." It is common for partnerships to consiste of persons who contribute money or equity and others who contribute labor. Your "buddy" had developed a money-making business, and you are trying to capitalize on this. You have to recognize that he deserves a piece of this business, and I think his request for 50% sounds entirely reasonable in these circumstances. In fact, he he created the original concept fo the business, build the business from scratch, developed its customer base, and made it profitable, he could argue that he is entitled to more than 50%.
The bottom line is this--you cannot just take over someone's business because you do a lot of the work. Further, your partner likely has substantial claims against you should he decide to litigate. Litigation is expensive--I strongly urge you to consider a mechanism for settling this matter expeditiously, perhaps through mediation. And of course, you must retain counsel to represent you in this matter---do not try to handle this on your own--with great respect, I can tell from your question that your understanding of the applicable legal concepts is deficient, and you need to receive advice of competent counsel.
