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My first instinct is to congratulate Shred for standing up to the big bully. That was really almost what I posted. But pick apart Shred's note, and really it's

My first instinct is to congratulate Shred for standing up to the big bully. That was really almost what I posted. But pick apart Shred's note, and really it's an emotional appeal based on two ideas: 1. That the sole test of stealing ideas is source code that has been copied verbatim. 2. That the only possible secrets of Smule are features implemented in released products. These are pretty weak legs to stand on. They're actually preposterous. Lawyers will tell you that it's really hard to prove theft in court without a smoking gun like "stolen source code", and the chances are, if they've stolen ideas in other ways, they will probably get away with it. Almost certainly, Shred's lawyers are playing a key strategy role in this PR campaign. So my advice is to be wary of emotional appeals from either side of litigation. We don't know what happened, and we learn less than we think from these notes. ps. Yes I read the remarks in Business Insider too. I'm not advocating that Smule is the innocent party here. Most likely this is some bullshit pissing contest with 0 innocent parties.

tomasien 11y ago
It's fair to plead for people not to read to much into this. But your suggestion that this is a "bullshit pissing contest with 0 innocent parties" seems ridiculous to me, given that a well funded company is suing a less funded company it doesn't compete with. You think that is the most likely scenario? Really??
- mikeshreds 11y ago
  It certainly seems like a reach to just assume bad behavior on both ends. Which actually, is one of the more insidious outcomes of making absurd claims against someone, even if they're completely false. People naturally respond "well, no one would be crazy enough to make something like that up, so there must be some truth to it."
mangeletti 11y ago
Wow, this is a really informed comment. To add to this, as a software engineer, while thinking through Smule's AutoRap app and the Shred Video app, I couldn't help but think that they could both probably benefit from a similar method for detecting (or synching with) beats, chorus, etc. Even though this sort of audio posterization (I'm not sure what it's really called) is not entirely novel, it's probably a reasonably tough problem to solve. If I had to guess, I'd guess that this aspect is what Smule's case is based on. FTR: I hope Shred Video wins, because, based on the Business Insider article linked herein, Smith seems to be, IMHO, a huge bully.
- mikeshreds 11y ago
  Don't you think this will be absolved with a review of Shred Video's code/methods vs Smule's code/methods? And isn't it telling that Shred Video is more than willing to submit to such a review, but Smule has not yet acquiesced?
  - deleted 11y ago
    [deleted]
  - lacker 11y ago
    That doesn't seem telling to me, because Smule is probably just listening to their lawyers. And their lawyers are probably advising them to just wait for court. That seems like the right strategy for Smule regardless of the facts of the case.
    - mikeshreds 11y ago
      What do you mean by "right strategy" in this sense? Doing a 3rd party review of Shred vs Smule code/methods will give them a trove of relevant information if they intend to win on the merits. In my understanding, refusing it is only the "right strategy" if your intent is to not have the case go to trial.
      - lacker 11y ago
        Exactly. Regardless of whether they are right or wrong, if their goal is just to win this case, it doesn't seem like it's in their best interests to have the case go to trial, if they think they'll win before a trial.
      - anseljh 11y ago
        Try another point of view. If this review was done outside the case, then it would very likely have to be re-done later IN the case with expert witnesses who are disclosed to the other side through the formal discovery process. It's not crazy to want to avoid duplicating that cost. Also, they can challenge Shred's expert in court if they don't like who you pick. And...I saw the court filings...you have a lawyer...stop talking to randos on HN for advice. :)
mikeshreds 11y ago
Hi Paul thanks for your comments. In the code comparison, the 3rd party will also be able to look at methods (in addition to code copied directly). We're more than happy to include proprietary methods in the review. On stealing "ideas," do you have some advice here? Smule has never specified what ideas they think we stole. What do you think is our burden of responsibility in proving we did not steal ideas our opponents won't even specify?
- AnimalMuppet 11y ago
  I've seen this kind of stunt before, in the SCO v. IBM lawsuit. Your defense is to get the court to require the other side to state specifically what they think you stole, or to drop the claim. The law is on your side here. Vague claims aren't a part of a valid lawsuit. "Failure to state a claim actionable at law" may be the phrase you need. But what you really need is lawyers, and IANAL.
  - mikeshreds 11y ago
    Yes, thoughtful response, our lawyers are looking into this very strategy.
    - joshuahutt 11y ago
      Unless it's part of your legal strategy, it's probably not advisable to discuss your strategy publicly, before or during legal proceedings.
- sandworm101 11y ago
  "Ideas" isn't a form of IP that can be stolen. Did you patent anything? Have you appropriately protected these ideas to qualify for any sort of tradesecret protections? (ps. Don't answer. This is the sort of thing to be discussed with an attorney behind a closed door.)
  - ClintEhrlich 11y ago
    That's not quite accurate: "Ideas" cannot be patented or copyrighted, but they can be protected by contract. The distinction is who the right to the idea is enforceable against. A patent represents a government enforced monopoly that bars anyone from using the specific intellectual property, whereas a contractual right to an idea can only be enforced against the other party to the agreement. In California, the seminal case is the Supreme Court's decision in Desny v. Wilder, which held that a screenwriter could enforce a studio's promise not to use one of his ideas without his consent. The Court's reasoning was that while a party is free to come up with its own ideas, the disclosure of someone else's idea confers a benefit. Federal courts have addressed this issue a lot in a line of cases holding that Desny claims are not preempted by the Copyright Act. I haven't been involved in any cases where the alleged theft of an idea involved an employment contract, but I see no reason why the same principles would not apply. Logically, an employer should be able to disclose propriety ideas to its employees without fear that they will be stolen, regardless of whether the ideas are sufficiently novel to qualify for an exclusive federal monopoly.
aidenn0 11y ago
How can you steal an idea? There is little to no protection for ideas. More tangible information may have a lot of protection, but ideas are more-or-less fair game.
- analog31 11y ago
  I'm not a lawyer, but as I understand it, if you're under non disclosure, somebody shares an idea with you, and you use it, then you've stolen an idea. Or, if the idea is patented. Enforcement could be another issue, depending on evidence.
  - aidenn0 11y ago
    You also can't patent ideas.
  - sandworm101 11y ago
    Non-disclosure is just a form of contract. It doesn't itself protect ideas from theft. If they are valuable enough, or if the contract is not enforceable, then the person can still walk away with the material. They need to look to tradesecret law, that is IF any of their code qualifies for tradesecret protection. The big if is in the relevant code: "(d) Trade secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." http://www.leginfo.ca.gov/cgi-bin/displaycode?file=3426-3426.11&group=03001-04000&section=civ http://www.leginfo.ca.gov/cgi-bin/displaycode?file=3426-3426...
- tptacek 11y ago
  That's probably not even close to true. Without wading into the morass of what an "idea" is, a boilerplate employee agreement might list things like: technical information, methods, processes, formulae, compositions, systems, techniques, inventions, machines, computer programs, research, business information, customer lists, pricing data, sources of supply, financial data, and marketing, production, or merchandising systems or plans If your employer is working with a concept or idea and can tangibly tie it to anything like these (or any of a similar list of "artifacts") that employees had access to, then it's very dangerous for employees to start their own firms based on those concepts or ideas. (I have no idea what's going on with Smule/Shred! Shred sounds very credible right now.)
tlrobinson 11y ago
"source code that has been copied verbatim." There are tools that will detect source code with similar but not identical structure.
- nness 11y ago
  Lexicographic analysis, I think it's called. Back at university, they would run checks against the byte-code (Java, woo) to find people who were sharing their source. Caught a few people out in the earlier years who thought changing variable names was enough to avoid plagiarism.
david_shaw 11y ago
I appreciate this unbiased view. You're absolutely right that reading emotional appeals online is a slippery slope. However, reading this Business Insider article about the case (http://www.businessinsider.com/smule-ceo-shred-video-lawsuit-2015-9 http://www.businessinsider.com/smule-ceo-shred-video-lawsuit...) really underscores the apparent sleaze on Smule's side: > You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win. > Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win. Pretty much no matter how you slice it, saying "even if we're wrong, we'll win" because of money in the bank sounds pretty awful.
- hvo 11y ago
  In other words,head we win,tail you loose,according to Jeff Smith.Sounds like a bully to me.
- jfoutz 11y ago
  I wonder if it's possible to optimize the cost differential. (probably not for a 2 person startup, but maybe a little bigger). But once it's terminal, clear you can't win, just dump all the money into making lots of specific, esoteric claims that require Giant Law Firm to spend hundreds of hours researching and responding to. Loser pays legal fees, but if i can get you to spend an order of magnitude or two more than my dying company is worth, well, that's the kind of flameout i could take some satisfaction in. edit Now that i think about it a bit, contacting the oppositions' customers and asking about their record retention policies seems like a great way to go. not a subpoena, just several repeated enquiries, an email, a letter, follow up with a phone call or two about about how do you store records, how many records might you have about opposition company, who are the employees who interact with the opposition company. Hit the VP's of HR, Accounting and whoever does legal. You could probably get some really nice targeted facebook advertising for that set of people, "been scammed by x? call us" Social engineering is scary.
  - anseljh 11y ago
    In the US, the loser doesn't even always pay the legal fees. It depends.
grizzles 11y ago
lol @ preposterous. That's the law yo. Copyright - Source code that has been copied. Patent - Monopoly on an idea. Trade Secret Law - N/A. They are former employees. Non Compete Agreement - Agreements in restraint of competititon are void in California. Shred's story sounds credible to me. The fact that Smule offered to make this lawsuit go away in exchange for equity sounds a lot like extortion to me. Why would they settle for a % of a company when they already own 100% of the secret sauce that was stolen? If their claim is as baseless as this article [1] suggests, RICO or anti-SLAPP laws should definitely apply. [1] https://blog.ycombinator.com/on-the-shred-video-lawsuit https://blog.ycombinator.com/on-the-shred-video-lawsuit
- sandworm101 11y ago
  >Trade Secret Law - N/A. They are former employees. Non Compete Agreement - Agreements in restraint of competititon are void in California. I would respectfully disagree with these assertions. Trade Secret is not void just because someone is a former employee. You don't get to walk out the door with the secret recipes. And there are many exceptions to california's ban on non-compete agreements. Non-compete agreements are also very different than non-disclosure agreements.
  - hga 11y ago
    You don't get to walk out the door with the secret recipes. Indeed, but in general in the US you have to go to real efforts to create and keep secret such recipes. And I find it utterly amazing that California law, last time I checked, doesn't consider customer lists to be protectable trade secrets for salesmen (!!!).
    - sandworm101 11y ago
      I'm completely onboard with california on that one. Customer lists are not secret. Each and every customer knows they are a customer. Certainly the tax man knows who is an isn't a customer, along with any number of credit cards companies and banks that might process orders. So the alleged secret isn't really kept in-house.
x0x0 11y ago
Or a bareknuckled way to take 10% of a company, or even just a signal to intimidate current employees. I worked for a small ($30-$50m annual revenue) company sued by a giant ($47B annual revenue) company. The goal, which worked, was to drain my employer's bank accounts on $5+m of legal expenses per year to keep a superior but less expensive product out of market.
rayiner 11y ago
Reading stories from parties to litigation is like listening to a couple that just broke up discuss whose fault it was. You gotta read between the lines.
- mikeshreds 11y ago
  Of course, if one member in a couple has $40 million dollars and the other does not, and the rich one files a lawsuit against the other without even first talking to her, one might consider that the two are not equally culpable parties.
  - rayiner 11y ago
    Didn't mean to imply anything about your particular situation. Just a meta-point. Litigants rarely think they're in the wrong--they view the situation through the lens of their personal narratives of what happened.
ajju 11y ago
Most likely this is some bullshit pissing contest with 0 innocent parties. Pissing contests do not usually include one willing and one unwilling participant. Shred's note is not just an emotional appeal because if they did steal ideas, it is an open invitation for Smule to state what they are.
josaka 11y ago
It's also really hard to prove the absence of theft, e.g., of things like trade secrets in strategy, customer lists, and financial models. The consequence is that even if you're in the right, you can spend several hundred thousand on legal fees before you can get out of a case.
mcv 11y ago
> if they've stolen ideas in other ways How can ideas be stolen? They're not property. Source code is. Patents are. Ideas are not. If Smule had explicit plants to do exactly what Shred is doing and the Shred people left specifically to exploit that idea on their own, then maybe they might have a case appealing to trade secrets or something. But if Shred is doing something different that just happens to also be related to video and music, but does that in a different way, not using any of Smule's algorithms, I don't see how they can possibly have a case. Unless, of course, you accept that employers own the work experience of their employees. I'm sure some would wish to.

tomasien 11y ago

It's fair to plead for people not to read to much into this. But your suggestion that this is a "bullshit pissing contest with 0 innocent parties" seems ridiculous to me, given that a well funded company is suing a less funded company it doesn't compete with. You think that is the most likely scenario? Really??

mikeshreds 11y ago
It certainly seems like a reach to just assume bad behavior on both ends. Which actually, is one of the more insidious outcomes of making absurd claims against someone, even if they're completely false. People naturally respond "well, no one would be crazy enough to make something like that up, so there must be some truth to it."

mangeletti 11y ago

Wow, this is a really informed comment. To add to this, as a software engineer, while thinking through Smule's AutoRap app and the Shred Video app, I couldn't help but think that they could both probably benefit from a similar method for detecting (or synching with) beats, chorus, etc. Even though this sort of audio posterization (I'm not sure what it's really called) is not entirely novel, it's probably a reasonably tough problem to solve. If I had to guess, I'd guess that this aspect is what Smule's case is based on. FTR: I hope Shred Video wins, because, based on the Business Insider article linked herein, Smith seems to be, IMHO, a huge bully.

mikeshreds 11y ago
Don't you think this will be absolved with a review of Shred Video's code/methods vs Smule's code/methods? And isn't it telling that Shred Video is more than willing to submit to such a review, but Smule has not yet acquiesced?
- deleted 11y ago
  [deleted]
- lacker 11y ago
  That doesn't seem telling to me, because Smule is probably just listening to their lawyers. And their lawyers are probably advising them to just wait for court. That seems like the right strategy for Smule regardless of the facts of the case.
  - mikeshreds 11y ago
    What do you mean by "right strategy" in this sense? Doing a 3rd party review of Shred vs Smule code/methods will give them a trove of relevant information if they intend to win on the merits. In my understanding, refusing it is only the "right strategy" if your intent is to not have the case go to trial.
    - lacker 11y ago
      Exactly. Regardless of whether they are right or wrong, if their goal is just to win this case, it doesn't seem like it's in their best interests to have the case go to trial, if they think they'll win before a trial.
    - anseljh 11y ago
      Try another point of view. If this review was done outside the case, then it would very likely have to be re-done later IN the case with expert witnesses who are disclosed to the other side through the formal discovery process. It's not crazy to want to avoid duplicating that cost. Also, they can challenge Shred's expert in court if they don't like who you pick. And...I saw the court filings...you have a lawyer...stop talking to randos on HN for advice. :)

mikeshreds 11y ago

Hi Paul thanks for your comments. In the code comparison, the 3rd party will also be able to look at methods (in addition to code copied directly). We're more than happy to include proprietary methods in the review. On stealing "ideas," do you have some advice here? Smule has never specified what ideas they think we stole. What do you think is our burden of responsibility in proving we did not steal ideas our opponents won't even specify?

AnimalMuppet 11y ago
I've seen this kind of stunt before, in the SCO v. IBM lawsuit. Your defense is to get the court to require the other side to state specifically what they think you stole, or to drop the claim. The law is on your side here. Vague claims aren't a part of a valid lawsuit. "Failure to state a claim actionable at law" may be the phrase you need. But what you really need is lawyers, and IANAL.
- mikeshreds 11y ago
  Yes, thoughtful response, our lawyers are looking into this very strategy.
  - joshuahutt 11y ago
    Unless it's part of your legal strategy, it's probably not advisable to discuss your strategy publicly, before or during legal proceedings.
sandworm101 11y ago
"Ideas" isn't a form of IP that can be stolen. Did you patent anything? Have you appropriately protected these ideas to qualify for any sort of tradesecret protections? (ps. Don't answer. This is the sort of thing to be discussed with an attorney behind a closed door.)
- ClintEhrlich 11y ago
  That's not quite accurate: "Ideas" cannot be patented or copyrighted, but they can be protected by contract. The distinction is who the right to the idea is enforceable against. A patent represents a government enforced monopoly that bars anyone from using the specific intellectual property, whereas a contractual right to an idea can only be enforced against the other party to the agreement. In California, the seminal case is the Supreme Court's decision in Desny v. Wilder, which held that a screenwriter could enforce a studio's promise not to use one of his ideas without his consent. The Court's reasoning was that while a party is free to come up with its own ideas, the disclosure of someone else's idea confers a benefit. Federal courts have addressed this issue a lot in a line of cases holding that Desny claims are not preempted by the Copyright Act. I haven't been involved in any cases where the alleged theft of an idea involved an employment contract, but I see no reason why the same principles would not apply. Logically, an employer should be able to disclose propriety ideas to its employees without fear that they will be stolen, regardless of whether the ideas are sufficiently novel to qualify for an exclusive federal monopoly.

aidenn0 11y ago

How can you steal an idea? There is little to no protection for ideas. More tangible information may have a lot of protection, but ideas are more-or-less fair game.

analog31 11y ago
I'm not a lawyer, but as I understand it, if you're under non disclosure, somebody shares an idea with you, and you use it, then you've stolen an idea. Or, if the idea is patented. Enforcement could be another issue, depending on evidence.
- aidenn0 11y ago
  You also can't patent ideas.
- sandworm101 11y ago
  Non-disclosure is just a form of contract. It doesn't itself protect ideas from theft. If they are valuable enough, or if the contract is not enforceable, then the person can still walk away with the material. They need to look to tradesecret law, that is IF any of their code qualifies for tradesecret protection. The big if is in the relevant code: "(d) Trade secret means information, including a formula, pattern, compilation, program, device, method, technique, or process, that (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." http://www.leginfo.ca.gov/cgi-bin/displaycode?file=3426-3426.11&group=03001-04000&section=civ http://www.leginfo.ca.gov/cgi-bin/displaycode?file=3426-3426...
tptacek 11y ago
That's probably not even close to true. Without wading into the morass of what an "idea" is, a boilerplate employee agreement might list things like: technical information, methods, processes, formulae, compositions, systems, techniques, inventions, machines, computer programs, research, business information, customer lists, pricing data, sources of supply, financial data, and marketing, production, or merchandising systems or plans If your employer is working with a concept or idea and can tangibly tie it to anything like these (or any of a similar list of "artifacts") that employees had access to, then it's very dangerous for employees to start their own firms based on those concepts or ideas. (I have no idea what's going on with Smule/Shred! Shred sounds very credible right now.)

tlrobinson 11y ago

"source code that has been copied verbatim." There are tools that will detect source code with similar but not identical structure.

nness 11y ago
Lexicographic analysis, I think it's called. Back at university, they would run checks against the byte-code (Java, woo) to find people who were sharing their source. Caught a few people out in the earlier years who thought changing variable names was enough to avoid plagiarism.

david_shaw 11y ago

I appreciate this unbiased view. You're absolutely right that reading emotional appeals online is a slippery slope. However, reading this Business Insider article about the case (http://www.businessinsider.com/smule-ceo-shred-video-lawsuit-2015-9 http://www.businessinsider.com/smule-ceo-shred-video-lawsuit...) really underscores the apparent sleaze on Smule's side: > You compare a 100-person company with 10, 30, 40 million dollars in the bank to a two-person startup. If it goes to litigation, if we're wrong, we'll win. > Right? We'll win. We'll put a giant law firm on it and we'll do all of the discovery and we'll do all the depositions and we'll win. And if we're right, we'll still win. Pretty much no matter how you slice it, saying "even if we're wrong, we'll win" because of money in the bank sounds pretty awful.

hvo 11y ago
In other words,head we win,tail you loose,according to Jeff Smith.Sounds like a bully to me.
jfoutz 11y ago
I wonder if it's possible to optimize the cost differential. (probably not for a 2 person startup, but maybe a little bigger). But once it's terminal, clear you can't win, just dump all the money into making lots of specific, esoteric claims that require Giant Law Firm to spend hundreds of hours researching and responding to. Loser pays legal fees, but if i can get you to spend an order of magnitude or two more than my dying company is worth, well, that's the kind of flameout i could take some satisfaction in. edit Now that i think about it a bit, contacting the oppositions' customers and asking about their record retention policies seems like a great way to go. not a subpoena, just several repeated enquiries, an email, a letter, follow up with a phone call or two about about how do you store records, how many records might you have about opposition company, who are the employees who interact with the opposition company. Hit the VP's of HR, Accounting and whoever does legal. You could probably get some really nice targeted facebook advertising for that set of people, "been scammed by x? call us" Social engineering is scary.
- anseljh 11y ago
  In the US, the loser doesn't even always pay the legal fees. It depends.

grizzles 11y ago

lol @ preposterous. That's the law yo. Copyright - Source code that has been copied. Patent - Monopoly on an idea. Trade Secret Law - N/A. They are former employees. Non Compete Agreement - Agreements in restraint of competititon are void in California. Shred's story sounds credible to me. The fact that Smule offered to make this lawsuit go away in exchange for equity sounds a lot like extortion to me. Why would they settle for a % of a company when they already own 100% of the secret sauce that was stolen? If their claim is as baseless as this article [1] suggests, RICO or anti-SLAPP laws should definitely apply. [1] https://blog.ycombinator.com/on-the-shred-video-lawsuit https://blog.ycombinator.com/on-the-shred-video-lawsuit

sandworm101 11y ago
>Trade Secret Law - N/A. They are former employees. Non Compete Agreement - Agreements in restraint of competititon are void in California. I would respectfully disagree with these assertions. Trade Secret is not void just because someone is a former employee. You don't get to walk out the door with the secret recipes. And there are many exceptions to california's ban on non-compete agreements. Non-compete agreements are also very different than non-disclosure agreements.
- hga 11y ago
  You don't get to walk out the door with the secret recipes. Indeed, but in general in the US you have to go to real efforts to create and keep secret such recipes. And I find it utterly amazing that California law, last time I checked, doesn't consider customer lists to be protectable trade secrets for salesmen (!!!).
  - sandworm101 11y ago
    I'm completely onboard with california on that one. Customer lists are not secret. Each and every customer knows they are a customer. Certainly the tax man knows who is an isn't a customer, along with any number of credit cards companies and banks that might process orders. So the alleged secret isn't really kept in-house.

x0x0 11y ago

Or a bareknuckled way to take 10% of a company, or even just a signal to intimidate current employees. I worked for a small ($30-$50m annual revenue) company sued by a giant ($47B annual revenue) company. The goal, which worked, was to drain my employer's bank accounts on $5+m of legal expenses per year to keep a superior but less expensive product out of market.

rayiner 11y ago

Reading stories from parties to litigation is like listening to a couple that just broke up discuss whose fault it was. You gotta read between the lines.

mikeshreds 11y ago
Of course, if one member in a couple has $40 million dollars and the other does not, and the rich one files a lawsuit against the other without even first talking to her, one might consider that the two are not equally culpable parties.
- rayiner 11y ago
  Didn't mean to imply anything about your particular situation. Just a meta-point. Litigants rarely think they're in the wrong--they view the situation through the lens of their personal narratives of what happened.

ajju 11y ago

Most likely this is some bullshit pissing contest with 0 innocent parties. Pissing contests do not usually include one willing and one unwilling participant. Shred's note is not just an emotional appeal because if they did steal ideas, it is an open invitation for Smule to state what they are.

josaka 11y ago

It's also really hard to prove the absence of theft, e.g., of things like trade secrets in strategy, customer lists, and financial models. The consequence is that even if you're in the right, you can spend several hundred thousand on legal fees before you can get out of a case.

mcv 11y ago

> if they've stolen ideas in other ways How can ideas be stolen? They're not property. Source code is. Patents are. Ideas are not. If Smule had explicit plants to do exactly what Shred is doing and the Shred people left specifically to exploit that idea on their own, then maybe they might have a case appealing to trade secrets or something. But if Shred is doing something different that just happens to also be related to video and music, but does that in a different way, not using any of Smule's algorithms, I don't see how they can possibly have a case. Unless, of course, you accept that employers own the work experience of their employees. I'm sure some would wish to.