6 ms·

Ask HN: Startup stole our software, and raised $2MM with it. What should we do?

• ajan 12y ago
  Ouch! You should finish the software and launch a competitor.
  • johnward 12y ago
    Yeah if they stole a semi finished product I'm sure OP could blow them out of the water with feature. Thought the alleged thief has a jumpstart on marketing.
• mbesto 12y ago
  As with every dispute that comes up on Ask HN that requires legal action - get a lawyer. (and a good one)
  • LTheobald 12y ago
    And start putting together every piece of data you can that will help your case - emails, IM message logs, source code etc.
  • sseveran 12y ago
    Yes and don't skimp. You want someone who has experience litigating and will be able to accurately advise you on your chances of succeeding. You will probably want to use at least midsize firm if you are not located where they are since you may have more choice of venue. You will have to decide for yourself whether the expected outcome is worth the cost. If you decide to sue never talk to anyone about this again. In my experience lawyering is better left to the lawyers.
• rayiner 12y ago
  I wouldn't name and shame here on HN, because when you file a lawsuit they'll counterclaim for defamation. No point in muddying things. You're also susceptible to the defense that the PayPal dispute was a negotiation and settlement of the purchase price. Disclaimer: I'm not your lawyer, this isn't legal advice. Do get your own lawyer to advise you on this, one familiar with licensing disputes.
  • sergiotapia 12y ago
    Screw that, name and shame away. The nasty gits deserve it!
    • sharkweek 12y ago
      Maybe? First, we're trusting one person's word over another on HN; this is one of the wonderful reasons courts exist. And let's say hypothetically the person who just posted this loses in court, this nice little shaming comes back and bites them as a defamatory attack.
      • joeclark77 12y ago
        That's not how the legal system works in America. The process is the punishment. The software pirates have $2 million of somebody else's money that they can burn up going through a multi-year process. They will win this thing by forcing the OP to choose between giving up or being bankrupted by court costs. No way you can win. My suggestion would you find an experienced patent troll (er, I mean, intellectual property broker) and offer them a piece of the action if they can help you squeeze as much as possible out of your adversary. They presumably have the capital, skill, and ability to endure the legal process. Hey, I just discovered a good use for a patent troll!
        • danielweber 12y ago
          I really don't like people who steal software, but so far[1] we have one accusation here. Let's not completely destroy the accused right away based just on this. [1] It would be unfortunate if this drama played out on HN, he-said she-said style. Although the eventual resolution of this will be very interesting and relevant to developers and entrepreneurs so I expect to read about it here some day.
• dman 12y ago
  Find a lawyer. Dont comment any further on the matter in public.
  • adventured 12y ago
    This is the only advice to listen to. Succinct. Already commenting on HN is too far. It should have all been private. Do no further damage. For qeorge: If you win in court, depending on the outcome and or any settlement, you can potentially still write about the whole thing in a blog entry if you still feel the need to be public about it.
• deleted 12y ago
  [deleted]
• nakovet 12y ago
  Edit their names out of this post, this will definitely be used in court, get a lawyer.
• bindirector 12y ago
  oh cool, and they're taking this opportunity to cash in on vulnerable and disenfranchised populations. real winners here.
• throaway53261 12y ago
  I know this isn't Reddit or 4Chan, but I've never felt more compelled to post the following: http://i.imgur.com/agJIP.gif http://i.imgur.com/agJIP.gif
  • dalacv 12y ago
    Yup...http://i.imgur.com/NnoGhN1.gif http://i.imgur.com/NnoGhN1.gif
• austenallred 12y ago
  1. Stop talking about it publicly. 2. Hire a lawyer.
  • pkfrank 12y ago
    I feel like this is the only right answer. It's been said, but there's not much value in discussing this in public; it just introduces risk/complication. Are you really going to put any weight on insight gained from this thread? If not, the cost/benefit of keeping this up is out of whack. In that case, the "benefit" become solely the name/shame which isn't an awesome reflection of professionalism, either.
• mattwritescode 12y ago
  Personally I would not be posting things like this one the internet. The reason being if you sue them and in fact they aren't in the wrong they might decide to sue you back. Your making some very big claims. You could be sued for liable or malicious falsehood.
• andy_ppp 12y ago
  Oh dear, airing dirty laundry in public. Maybe there were reasons why Fredrick and Alfonzo didn't pay you? We wouldn't know as hacker news and you are unlikely to tell us. I would suggest letting a judge decide and hiring good legal council. However, I would say that your judgement in maybe panicking and posting so publicly is far from the mark. You should remove this post if you can as soon as possible. Only bad things can come of this!
• nkozyra 12y ago
  First things first, definitely edit the OP. You get nothing from outing them, much less calling them "thieves" in public. Don't give them any ammo. Second, gather your contract and lawyer up right now. The reality is you're probably still squeezing blood from a turnip (despite the VC); your best move would probably be asking for a licensing agreement in lieu of a bulk sum. Third, I think it makes sense to bring this to the attention of the VCs - it won't hurt (the way publicly outing them might) and they could possibly work at mitigating/mediating this. Again, $2M might seem like a lot to you, but this is mostly budgeted already. If, like most startups, this is relatively short-lived, you may want to recoup via a license, although this is a new contract that would need to be drawn up fresh.
  • mncolinlee 12y ago
    "Third, I think it makes sense to bring this to the attention of the VCs - it won't hurt (the way publicly outing them might) and they could possibly work at mitigating/mediating this." This seems like the best option. The VCs will want to minimize risk. If they think they can pay you a reasonable sum to make the past dispute go away, this may be your best option. It will most likely not involve expensive lawyers for too many billable hours.
  • rbobby 12y ago
    > Third, I think it makes sense to bring this to the attention of the VCs Don't do anything without talking to your lawyer. This advice could lead to claim a of tortious interference. Hell this whole post could be tortious interference.
• wehadfun 12y ago
  So a company started by felons stole software from you.
• deleted 12y ago
  [deleted]
• deleted 12y ago
  [deleted]
• grellas 12y ago
  You really need to be careful about how you approach this sort of issue. While the advice may be trite, it is particularly apt here to emphasize the importance of consulting with a lawyer who is strong on IP issues. In particular, this would normally need a careful evaluation of the contract language, which may or may not define what happens in the particular case you describe. If it should not adequately define what happens in express contract language, then there are default rules that potentially govern what happens. Those rules may or may not support your position. I have bumped into cases where the default rules basically say that the contract assigns the IP rights to the customer regardless of non-payment, with the remedy for the developer simply being to sue for payment. I am not saying that such rules govern your case because it is not possible for anyone to really know your case absent a proper legal review by a knowledgeable lawyer. I am saying you may be making assumptions about your legal rights that may or may not be correct and you should not casually just assume that they are. It goes without saying as well that you should be cautious about using pejorative language about the person who did this in public because of the obvious risk of setting yourself up for a defamation claim. Again, in the end you may be justified but why complicate your own claims by giving those who did whatever these people did free ammunition to fight you with. I don't mean to sound unsympathetic. It hurts to get screwed and it sounds like that happened here. Just be careful to go about it the right way in trying to correct the wrong that did occur.
• olssonm 12y ago
  Nobody can give you much more advice than to collect all your papers/email/documents regarding this and discuss it with a lawyer. I know your upset, and want to hit them hard – but outing them probably won't do much good in the long run.
• gomesnayagam 12y ago
  we are in the same boat, amazon zocalo is our app.collablayer.com ditto , we are adding another set of feature to come out of this nightmare.
• 0p9o8i7u 12y ago
  What like you own what you worked on?!?? Fuck that! Patents and ownership of property is fucking stupid! This is hacker news! Everyone knows that it's how well you implement, not whether you developed the idea or not. Clearly they implemented your idea that otherwise would have been nothing. If you had never written it someone else would have written is just as well as you did! That's how the world works nowadays. Right??!?
  • jordsmi 12y ago
    If the contract says they own it, they own it. That's how the world works
    • deleted 12y ago
      [deleted]
• partisan 12y ago
  I can appreciate the frustration you must be feeling. Working with clients seems to highlight the best and worst of humanity. I believe that you should always lead with your best. A situation such as this can definitely impact your business in a negative way. It's more of a one-sided allegation and your choice of wording is defamatory. At this point, consider hiring a lawyer. They may not be able to tell you what you should do, but they can definitely tell you what NOT to do, which is just as important sometimes. Good luck.
• sjtgraham 12y ago
  Read earlier today that one of the founders was convicted of drugs trafficking and served four years in the pen. http://www.forbes.com/sites/hollieslade/2014/08/21/how-this-man-built-a-3m-business-a-year-on-from-four-years-in-prison/ http://www.forbes.com/sites/hollieslade/2014/08/21/how-this-...
  • aepearson 12y ago
    What could this possibly have to do with anything? Maybe do a little research about the project first...you come off as pretty ignorant with a statement like that.
• rabidonrails 12y ago
  In cases like this, do investors usually have protections built into their investment contract that if something like stolen IP or possible fraud wasn't initially disclosed they can recall their investment? I imagine this can't be the first time something like this has come up.
  • Domenic_S 12y ago
    Sounds like the perfect use case for insurance, kind of like title insurance in real estate.
• bdcravens 12y ago
  Seems to me that your damages would be limited to the amount you originally agreed to. The fact that they had a funding round and press shouldn't matter. Payment + chargeback is a bit different than non-payment; complicating the fact is that you received some money from PayPal. Aside from PayPal, did you pursue any recourse? Does your contract have a mutual non-disclosure clause? If so, I suspect you just violated it. I'm sure when you saw their funding event, you were upset. Bottom line: if everything had gone according to plan, you would have been paid, and they'd still have their funding event.
• shahocean 12y ago
  I can understand your feelings but you gotta hire very GOOD lawyer! Keep Calm and Fight Legally!
• ChuckFrank 12y ago
  Thank you for sharing this information. I think that while jumping into the more expensive lawyer arena is one choice. A shot across the bow of Pigeon.ly is a good alternative. I think hiding behind lawyers benefits only the lawyers. As a civil society, I think people should be called out for their poor behavior, and explain themselves. You've made your case, now Pigeon.ly should explain themselves. A public court of opinion is, in the end, the only court that truly matters. Or so I think.
• oddtarball 12y ago
  Have you seen the Forbes article about this? Sounds like you're dealing with an ex-con. http://www.forbes.com/sites/hollieslade/2014/08/21/how-this-man-built-a-3m-business-a-year-on-from-four-years-in-prison/ http://www.forbes.com/sites/hollieslade/2014/08/21/how-this-...
• jordsmi 12y ago
  I find it funny how there's so many articles about this guy who was in prison then does right and starts this company. Then this comes out...
• deleted 12y ago
  [deleted]
• e15ctr0n 12y ago
  As a general rule, consultants should always develop code on their own servers and transfer the code to the client only when full payment is received. In this case, I realize that the ship has sailed, but I'm sure there is a lesson to be learned.
• rmena123 12y ago
  My question is why are you caring about it now, if it was 2 years ago? Now that it made HN.. now you care? Its funny how it didn't matter the past 2 years. If it was a real issue you would of gotten a lawyer already, get over it and keep on doing business. I'm tired of everything becoming a lawsuit over nothing that mattered in the first place. The only ones who will benefit in the long haul are the lawyers, don't waste money. Every lawyer that wants the case will tell you, you have a case and we got this, lawyers love to drag things out. Long and expensive process. Another question... How did they get all the code for the website if they hadn't paid in full? If my clients don't pay they never get any code on the server they own.? So you gave it all up before payment?
• gscott 12y ago
  I would do a DCMA take down notice against the web host and send it to whoever funded him as well. He did not pay in full. He not only stole the code but committed credit card fraud. If he has a parole officer I would try to find out.
• pskittle 12y ago
  i'm sorry for your loss. however you need to consult a lawyer to understand where you stand and what your options are. i'm not sure there a lot of them on hn. goodluck
• shannmcnicholl 12y ago
  How do you know that they are using any of your IP (code)? I presume that they approached you, originally, to create software for them, but the idea was theirs. If they terminate a contract with you, however unsatisfactorily, they are still free to start over with another dev agency. 3 years is a long time in terms of what can be delivered in software. The system doesn't sound all that difficult to replicate.
• jparkside 12y ago
  My name is Frederick Hutson, and I am the President and CEO of Pigeonly. I was recently made aware of this post. In light of the defamatory nature of the poster’s statements, I felt compelled to respond. Well over two years ago, we entered into a work-for-hire agreement with the poster to write aspects of the software code for a beta version of our initial e-commerce platform. Our agreement with the poster makes it clear that we own all work product produced pursuant to the agreement. In the end, however, we were very unhappy with the quality of the poster’s work so we terminated the relationship and requested a refund. In addition to my own assessment I consulted with several independent sources including a founding member of the CakePHP project (the framework the poster used). Everyone who evaluated the code said the same thing, to sum it up (in their professorial opinion) the framework was not utilized correctly which resulted in the numerous bugs and browser incompatibility issues. The truth is even if we wanted to work with the code the poster provided we couldn't because it was flawed. So we were left with no choice but to start from scratch with a new developer. The bottom line here is that through hard work and determination, we indeed built the Pigeonly platform from scratch and in no way incorporated any of the code produced by the poster. We are very proud of what we have built at Pigeonly, our mission is to build great products that solve the type of problems most would overlook.
  • cheery 12y ago
    Either one of you is in wrong or lying. And I don't know which of you. Doing some observations. pigeon.ly is layout is html5. The illuminatikarate.com is html4 on wordpress. Pigeon.ly is neatly made bootstrap -powered responsive website, whereas the IK website isn't. But this is just the face-value of the websites. I'd still expect a good web dev to have good, accessible, modern websites though. This is interesting but the information about this all is inconclusive. I can see that Frederick was wise to answer to this post. It's more obvious now that that the claims haven't been backed up by anything.
  • korzun 12y ago
    > In light of the defamatory nature of the poster’s statements, I felt compelled to respond. Useless filler. > Our agreement with the poster makes it clear that we own all work product produced pursuant to the agreement. Again, useless filler. You own the work and they need their money for work in question. > I consulted with several independent sources including a founding member of the CakePHP project That's great. I audited hundreds if implementations that sucked. The different is that those developers still got paid. It's your fault for not knowing what you are doing and not having another source involved earlier in the process to make sure things are going smoothly. Also, you are showing your lack of experience. Project was 2 years long (multiple CakePHP releases, I bet?) ofcourse people will say it's outdated and written poorly. You are also working with a low level agency (no offense) and then get the code reviewed by 'founding member of X', what do you expect? Are you even serious here? > So we were left with no choice but to start from scratch with a new developer. Let me audit that code, I'm 100% sure it will not be up to /my/ standards. Will you fire the developer and sue him for the salary you paid? > The bottom line here is that through hard work and determination, The bottom line here is that you really have no idea about technology.
• AngeloAnolin 12y ago
  Disputes like this at the very least becomes very costly for both parties, notwithstanding the fact the damage each one may inflict in just trying to get the upper hand over the other. Considering that you've brokered into an agreement before, haven't you explored the possibility of just resolving this amicably, with both parties finding a common ground to ensure a win-win situation for both. Going through the lawyers and courts should be the last resort. I know to some degree this advice (which you could take with a grain of salt) may not hold some ground with the others. But just the same, you've worked together before and there should be no reason for you not to be able to settle things properly.