Advice on a sticky situtation

[rjbshaitan]

Hi Guys,

Firstly I would like to thank you for reading my rather wordy posting

Initial setup of the project

- Me, my brother and two colleagues friends about 10 months ago decided to invest time and money into developing a bespoke system for a gap in the market.
- My brother introduced me to this venture, as he knew the other 2 individuals who were willing to invest
- The initial agreement was that we would all take a 25% split equity in the venture
- I estimated that to develop the system would cost 10k, which was approximately 100 working days, so was doing the work at a significant discount
- Seeing as I was going to be doing the development, we all agreed that I would forgo my 2.5k capital investment, as there was no point, paying myself as such
- My brother was not happy with this approach, as he felt that since he had introduced me to the venture, my equity share should be zero, as I was being paid
- Shortly afterwards (Days), My brother and one of the individuals decided to change the equity split, so I would get zero, and the 25% that was agreed between the 4 of us, would be held in reserve for potential future work, or another developer
- This was hidden from the 4th friend, and I was told that if it came up, I was to say that I was happy with the new agreement
- My brother sent me a list of terms and conditions that I had to agree to before things would commence. Due to personal circumstances at the time, I had no choice, so reluctantly agreed
- One of these terms, referenced payment would be in a timely manner and a matter of a few days.

- I created the concept of the system and went on to develop it based on the initial core features
- I developed additional features above and beyond what part of the original specification, which was weeks of work, as I had a passion for the product
- One of the individuals, when I asked for payment took months, and only paid when I threatened him with the small claims court, by taking so long to pay, he broke the previously agreement
- When I mentioned to my brother that the individual was not paying promptly, my brother said 'its business' and that I had to chase him myself for the money, even though they were both agreed to the amended 'agreement'


Where things stand at the moment


- There was never any written or inferred agreement on the transfer if copyright/ IP for the final product
- Due to the late payment, the 'amended agreement' was null and void.
- Seeing as spent many days further developing the system, above and beyond what was initially agreed, the product as it stands is materially different from what was originally proposed
- There is a good chance that the product in partnership with another company can generate substantial amounts of money
- My brother is being unreasonable on several points(he wants to potentially engage with another developer to take over the product, and also cut me out, he is still of the view that the equity change is still valid), he wants to take the day to day control of the business
- I created the software while working under my own limited company, so technically the company owns the IP/Copyright, and not myself
- All payments were made to the limited company, not myself

My views on the situation

-I do not want to rock the boat to the point that the business/concept falls apart due to internal bickering/issues
- One of the individuals is reasonable and was not a party to the amended 'agreement', so exploring the situation with him may be feasible
-I feel that I own the IP, there was never a formal agreement to transfer it, and the terms and conditions that my brother put together did not mention anything any IP/Copyright transfer
-I am tempted to highlight this to him, as he is under the misunderstanding that because he came up with the initial idea, he owns the IP,
- The software requires some further modifications before it is suitable for the new market. This market was not envisaged as within the initial concept
-Also I feel that I would be a strong position to take the driving seat in the business, and then determine a fair way forward, which if I was not happy with, would result in them not being able to use the software, and I would explore potential business myself with the other one or two individuals who were agreeable to that approach. I would pay back my brother's initial investment, as this is only fair

What is everyone's thoughts on the situation?

[Lance]

Walk away. This cannot end well, so don't try and make it end well.
It sounds like there is no business, just a product without customers.
And it sounds like there's too much water under the bridge now.

In future. Don't enter into business without a clear contractual agreement.

[jmo21]

£7.5k for 100 days work, and no equity?

You’re an idiot, and your brother is an arsehole.

Oh you meant what to do next? Fook knows.

[TheInvoicer]

Leave now, don’t enter into business with family and get the contract/legal aspect sorted from the go.


Sent from my iPhone using Tapatalk

[cojak]

Walk away legally.

Take advice from a solicitor on how to get out of this mess without your tulip of a brother clinging to you like a leech (I suspect you’ll be surprised how quickly he’ll threaten legal action to try and lock you in to this situation - better a tame dev than one who knows how to write a contract).

Then you can go off and do it again - you’ve written decent software once, you can do it again, and without your brother claiming copyright infringement.

Oh, and don’t bother with family Christmas’s ever again.

[Lance]

Walk away legally.

Take advice from a solicitor on how to get out of this mess without your tulip of a brother clinging to you like a leech (I suspect you’ll be surprised how quickly he’ll threaten legal action to try and lock you in to this situation - better a tame dev than one who knows how to write a contract).

Then you can go off and do it again - you’ve written decent software once, you can do it again, and without your brother claiming copyright infringement.

Oh, and don’t bother with family Christmas’s ever again.

Whilst I'm usually the first to suggest professional legal advice, I'm not sure it's valid if the OP walks away with nothing (there's nothing to take really, just code with no business).
The brother can shout as much as he wants but we abolished slavery 200 years ago (give or take).
Only if the OP wants to keep the code, or some of the non-existent business, is legal help needed.

[cojak]

Whilst I'm usually the first to suggest professional legal advice, I'm not sure it's valid if the OP walks away with nothing (there's nothing to take really, just code with no business).
The brother can shout as much as he wants but we abolished slavery 200 years ago (give or take).
Only if the OP wants to keep the code, or some of the non-existent business, is legal help needed.

Fair enough, but as we’ve seen in other fora, signing anything resembling a legal contract can get you into all sorts of problems if you don’t extricate yourself from them properly.

[GhostofTarbera]

How many customers are lined up to buy ?


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[fool]

Whilst I'm usually the first to suggest professional legal advice, I'm not sure it's valid if the OP walks away with nothing (there's nothing to take really, just code with no business).
The brother can shout as much as he wants but we abolished slavery 200 years ago (give or take).
Only if the OP wants to keep the code, or some of the non-existent business, is legal help needed.

Sounds like the OP got paid actually, so I suppose could have some legal liability, but in reality I'd also just walk away without lawyers.

@OP: Sorry, but I don't believe late payment actually breaks / changes the agreement. Fairly sure they own the IP and that's that.

If we wanna talk about legal loopholes, I suppose if you really think the idea is worth boatloads, you can sell it, then build a clean room implementation of the codebase. The second you copy and paste some code, you're in murkey waters. You'd be better deleting what you have up front.

From a more pragmatic point of view, if you can just sell what you have. Let them legally challenge you. If it's really worth what you think it is, you'll have the better lawyers.

[rjbshaitan]

Thanks guys for all your replies. I just want to clarify a couple of points

- The original verbal agreement was that all 4 of us would get 25% equity in exchange for putting in 2.5k, as i costed the software at 10k, so in effect I was contributing 2.5k into the mix, so had a part of the equity.
- there was never anything in writing, besides the minor terms regarding payment terms and some other things, regarding the IP
- My understanding of copyright is that in nearly all cases, unless can be proven otherwise in writing the author has the ip


There is a lot of potential money to come in, as we have partnered with a broker network to offer the software to potentially 100's if not 1000's of end users. Also end of the day, my brother is just one of four in this partnership, so while he has some sway, it not any less or more than anyone else, so I going to see how the next face to face meeting goes with us all, where we will discuss the situation.

i will let you all know how i get on.

Thanks again