legalI’m not sure if this is the correct exchange for this type of question. If not perhaps someone could direct me to a more appropriate exchange. I’ll try to keep this brief and add more details as requested.
Back in April, I joined two others in a project to build a web app. Our intent was to create an LLC (or some other legal entity) where each of us would have a 1/3 interest in the business. No legal entity was ever formed, and nothing was ever signed. From roughly April to mid June, I spent approximately 200 hours researching and developing the app. The other two guys had no role in any of the development and spent no time in any part of the development.
About six weeks ago it became apparent to me this arrangement wasn’t going to work. I was the one doing all the work, and one of the other guys decided the time wasn’t right for him to move forward with this. Because of this, and a couple other reasons, I decided I didn’t want to form a parntership with them.
My question is this, who owns the source code to the app? I claim I do since I put 100% of the effort and time writing it, and wasn’t paid anything. One of the other guys, who is an attorney, claims I only have a 1/3 interest in the app. Who is right?
I'd say in the absence of any document (written agreement) "ownership" (if you could say that about a software application) -- I guess the proper term would be "copyright" -- belongs to the author, unless there is an explicit or implicit license attached to the sources.
For example, if you keep your sources in a public repository, such as Github, and you don't post a license, random people can claim certain rights to the code.
At a practical level "ownership" rests with whoever controls the sources. If you shared copies of the source code with your (now former) partners, without having them to agree to a sort of a license, I'm afraid they are equally entitled to benefit from using the source code. This essentially means they are unfortunately free to use it as they see fit. However, in the absence of a partnership agreement, they are not entitled to any benefit you may obtain from using the code as you see fit.
Practically speaking, you can give that attorney guy 1/3 of the sources, measured in lines of code, and wish him (her) luck.
NOTE: I am not a lawyer, don't heed my advice.
This is not actually an un-common situation in start-ups, in that other members of the group may not have skills to contribute beyond ideas and suggestions in the development phase.
The more interesting question is if you have the skills and contacts to get it from product to market. If so, and if they are still not pulling weight then by all means go for it. On the other hand if you do not have the marketing skills or contacts, and your co-founders do, then sticking with them is the best approach, so long as they actually do something with it now that its developed.
For future reference, the correct way to deal with this is to build in dynamic equity splits into your agreements, so that as the contribution and commitment of the founders becomes clear then the equity can reflect the contributions.
I’d suggest reading ‘Co-founders Dilemmas’ which discusses equity splits and choosing co-founders among other decisions.
Nobody paid you? You didn’t sign anything? You wrote all the code yourself? And you have possession of all the code and didn’t share it?
What reason would you have to think anybody in the group owes anything to any other member of the group or to the group itself?
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