7 ms·

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 empl

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.
  - anseljh 11y ago
    This is SUPER wrong. Customer lists were one of the original trade secrets under common law, and they still are trade secrets--as long as they're kept secret. More modern applications: "Business Information Trade secrets in this category may include: ... Customer lists" http://www.fenwick.com/FenwickDocuments/Trade_Secrets_Protection.pdf http://www.fenwick.com/FenwickDocuments/Trade_Secrets_Protec... "California court affirms that customer lists can qualify as trade secrets" http://www.lexology.com/library/detail.aspx?g=ea22e316-7210-4681-806b-42b1bb22162d http://www.lexology.com/library/detail.aspx?g=ea22e316-7210-...
    - hga 11y ago
      The case you cited in your last link could have been decided after I read whatever it was I read. It could be that it's pretty hard to make and keep such lists as trade secrets, or maybe what I read referred to just a list of customers with all that other information, but I remember it being pretty definitive, and, generally agreeing with your initial points, startling.
      - anseljh 11y ago
        The law of customer lists being trade secrets is literally centuries old. Perhaps you're remembering a recent case about whether LinkedIn contacts could qualify as trade secrets, which tested where to draw the line: http://blogs.orrick.com/trade-secrets-watch/2014/10/27/new-strings-attached-linkedin-contacts-are-now-trade-secrets/ http://blogs.orrick.com/trade-secrets-watch/2014/10/27/new-s...
        sandworm101 11y ago
        No. The tradition is old. The law has been revisited and updates many hundreds of time.
        anseljh 11y ago
        Um. That "old" "tradition" is binding law until it's overruled. It hasn't been. Again, here are the current California trade secrets statutes: http://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=4.&title=5.&part=1.&chapter=&article= http://leginfo.legislature.ca.gov/faces/codes_displayText.xh...
- mikeshreds 11y ago
  Just want to point out that Smule has not cited trade secret theft as a claim against us. And on non-compete, Mark and I were just employees, not officers of any sort. Neither of us was a manager with direct reports.
  - sandworm101 11y ago
    There are two ways to 'win' a civil suit. Counter their allegations, or assert your own counterclaims. It may be possible to assert that they have taken your trade secrets. Talk to lawyers. In offices. Not online. Sign a client agreement. Pay them money. Beyond that, you cannot get any reliable advice from anyone here.
    - hga 11y ago
      There's also the "run out the clock" method, i.e. drain the other company of money, energy, time, etc. Which appears to be exactly the worst case the plaintiff is imaging per the words he was rather unwise to utter in an all hands meeting (http://www.businessinsider.com/smule-ceo-shred-video-lawsuit-2015-9 http://www.businessinsider.com/smule-ceo-shred-video-lawsuit...): [...] And here's the sad truth. 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.... (Note: discovery can be very expensive, and depositions tend to take a lot of time in preparation and the actual deposition.) Which suggests the defendant isn't entirely insane to try to win this in the court of public opinion, a worst case apparently not imagined heretofore.
- grizzles 11y ago
  There was no "misappropriation" here. Employment does not qualify as "improper means". [1] Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again. [1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act
  - sandworm101 11y ago
    Yes. That is reality. Talk to anyone in aerospace. Techniques developed for employer A cannot be taken to employer B. I'm not saying it doesn't happen, just that there are laws on the books to prevent it. Imagine the slippery slope if former employees of Coke were allowed to take the recipe over to Pepsi. We wouldn't have any long-lived product lines. (That actually happened. Pepsi called the FBI) For below: 18 U.S. Code § 1832 - Theft of trade secrets (the really really short version) "Whoever ... knowingly ... steals, or without authorization appropriates ... or by fraud, artifice, or deception obtains such information ... shall ... be fined under this title or imprisoned not more than 10 years, or both."
    - mentat 11y ago
      What laws?
    - grizzles 11y ago
      sandworm101: That's a really interesting comment. It sounds very anti free market to me, but I guess I'm not surprised. I guess the only recourse for a founder led company in that situation would be to leave the US. Not necessarily a great result. OT: Regarding the Coke/Pepsi thing, personally I think food manufacturers (I use the term loosely) should be forced to disclose what's in their products. Though I would strongly agree that this comment has nothing to do with the rest of our previous discussion.
      - sandworm101 11y ago
paulsutter 11y ago
Trade secrets are indeed protected under California law yo. http://www.nolo.com/legal-encyclopedia/california-trade-secret-law.html http://www.nolo.com/legal-encyclopedia/california-trade-secr... - "California is unique in that its laws expressly establish that the employer owns trade secrets created by an employee (Cal. Labor Code Sec. 2860)." - "Federal rules also apply in California. The Economic Espionage Act of 1996 makes the theft of trade secrets a federal crime."
chrismcb 11y ago
Patents do not offer a monopoly on an idea. They offer protection of an invention a process a machine, but not an idea.

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.
- anseljh 11y ago
  This is SUPER wrong. Customer lists were one of the original trade secrets under common law, and they still are trade secrets--as long as they're kept secret. More modern applications: "Business Information Trade secrets in this category may include: ... Customer lists" http://www.fenwick.com/FenwickDocuments/Trade_Secrets_Protection.pdf http://www.fenwick.com/FenwickDocuments/Trade_Secrets_Protec... "California court affirms that customer lists can qualify as trade secrets" http://www.lexology.com/library/detail.aspx?g=ea22e316-7210-4681-806b-42b1bb22162d http://www.lexology.com/library/detail.aspx?g=ea22e316-7210-...
  - hga 11y ago
    The case you cited in your last link could have been decided after I read whatever it was I read. It could be that it's pretty hard to make and keep such lists as trade secrets, or maybe what I read referred to just a list of customers with all that other information, but I remember it being pretty definitive, and, generally agreeing with your initial points, startling.
    - anseljh 11y ago
      The law of customer lists being trade secrets is literally centuries old. Perhaps you're remembering a recent case about whether LinkedIn contacts could qualify as trade secrets, which tested where to draw the line: http://blogs.orrick.com/trade-secrets-watch/2014/10/27/new-strings-attached-linkedin-contacts-are-now-trade-secrets/ http://blogs.orrick.com/trade-secrets-watch/2014/10/27/new-s...
      - sandworm101 11y ago
        No. The tradition is old. The law has been revisited and updates many hundreds of time.
        anseljh 11y ago
        Um. That "old" "tradition" is binding law until it's overruled. It hasn't been. Again, here are the current California trade secrets statutes: http://leginfo.legislature.ca.gov/faces/codes_displayText.xhtml?lawCode=CIV&division=4.&title=5.&part=1.&chapter=&article= http://leginfo.legislature.ca.gov/faces/codes_displayText.xh...
mikeshreds 11y ago
Just want to point out that Smule has not cited trade secret theft as a claim against us. And on non-compete, Mark and I were just employees, not officers of any sort. Neither of us was a manager with direct reports.
- sandworm101 11y ago
  There are two ways to 'win' a civil suit. Counter their allegations, or assert your own counterclaims. It may be possible to assert that they have taken your trade secrets. Talk to lawyers. In offices. Not online. Sign a client agreement. Pay them money. Beyond that, you cannot get any reliable advice from anyone here.
  - hga 11y ago
    There's also the "run out the clock" method, i.e. drain the other company of money, energy, time, etc. Which appears to be exactly the worst case the plaintiff is imaging per the words he was rather unwise to utter in an all hands meeting (http://www.businessinsider.com/smule-ceo-shred-video-lawsuit-2015-9 http://www.businessinsider.com/smule-ceo-shred-video-lawsuit...): [...] And here's the sad truth. 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.... (Note: discovery can be very expensive, and depositions tend to take a lot of time in preparation and the actual deposition.) Which suggests the defendant isn't entirely insane to try to win this in the court of public opinion, a worst case apparently not imagined heretofore.
grizzles 11y ago
There was no "misappropriation" here. Employment does not qualify as "improper means". [1] Just imagine for a moment the slippery slope this would create if companies were able to criminalize knowledge on the basis of prior employment. Literally any work process you performed could be considered protected IP. You could work one job and never be employable again. [1] https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act https://en.wikipedia.org/wiki/Uniform_Trade_Secrets_Act
- sandworm101 11y ago
  Yes. That is reality. Talk to anyone in aerospace. Techniques developed for employer A cannot be taken to employer B. I'm not saying it doesn't happen, just that there are laws on the books to prevent it. Imagine the slippery slope if former employees of Coke were allowed to take the recipe over to Pepsi. We wouldn't have any long-lived product lines. (That actually happened. Pepsi called the FBI) For below: 18 U.S. Code § 1832 - Theft of trade secrets (the really really short version) "Whoever ... knowingly ... steals, or without authorization appropriates ... or by fraud, artifice, or deception obtains such information ... shall ... be fined under this title or imprisoned not more than 10 years, or both."
  - mentat 11y ago
    What laws?
  - grizzles 11y ago
    sandworm101: That's a really interesting comment. It sounds very anti free market to me, but I guess I'm not surprised. I guess the only recourse for a founder led company in that situation would be to leave the US. Not necessarily a great result. OT: Regarding the Coke/Pepsi thing, personally I think food manufacturers (I use the term loosely) should be forced to disclose what's in their products. Though I would strongly agree that this comment has nothing to do with the rest of our previous discussion.
    - sandworm101 11y ago

paulsutter 11y ago

Trade secrets are indeed protected under California law yo. http://www.nolo.com/legal-encyclopedia/california-trade-secret-law.html http://www.nolo.com/legal-encyclopedia/california-trade-secr... - "California is unique in that its laws expressly establish that the employer owns trade secrets created by an employee (Cal. Labor Code Sec. 2860)." - "Federal rules also apply in California. The Economic Espionage Act of 1996 makes the theft of trade secrets a federal crime."

chrismcb 11y ago

Patents do not offer a monopoly on an idea. They offer protection of an invention a process a machine, but not an idea.