We came up with an idea and some code after a weekend of collaboration. What should we do about the team member who does not want to join in the commercialization of the result?

Question

Hi there! I'm very excited about this feature and looking forward to your input, thank you in advance! My question is basically: When a team of four develops the idea and a core version of a software together, and then part of the team decides to turn it into a business, what are the legal issues concerning the fourth guy?

I was part of a team of four IT developers/engineers who developed an idea for improvements to the current state-of-the-art of Computational Fluid Dynamics (CFD) software and wrote a prototype over a weekend. The project started out more as an interesting thing to do rather than a serious business idea. However, three of us would like to keep working on the project and develop it into a product that can be commercialized. Unfortunately, the fourth guy is not part of the team anymore, as he was not interested in pursuing the idea as a business and I guess he prefers to stay in his current job full-time. Are there any "legal" steps we should take or is this not a big deal for the three of us? So far, the issue has not presented itself as a problem, but I guess it would be good to prevent any legal trouble in the future rather sooner than later. On the other hand, we are not even in our post-seed stage yet and legal fees -- should legal consultation be necessary -- should be minimal. What sort of expense would be looking at overall?

My question concerns an issue that probably occurs with many startups, but so far we have not sought any legal advice as it has not become necessary yet.

Answers: 1 public & 2 private

77f6bb54dc
Patent Attorney

One issue you should consider is that if your project generates intellectual property (which qualifies for patent protection), entitlement issues may arise given that the fourth member of your team is arguably a co-inventor (depending on his contribution). This may adversely impact on the validity of the patent if the fourth member changes his mind down the road and decides that he wants a share of the patent. It may be prudent to obtain some form of written consent/agreement that he relinquishes/assigns his rights to the invention to the rest of the team.

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