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I am in a very unusual spot and seeking some clarity from those who really know this stuff.

So I had an idea about a software product for about 2 years.

I hired multiple freelancers but failed to get anywhere because the freelancers couldn’t find a solution to the problem I am trying to solve technically.

One freelancer came really close to the solution but my trusted friend suggested that I should show the code to his friend and get his opinion as he too is a developer.

So I explained the problem I am working on, the idea of the product and the code that I have from this freelancer that I hired to this friend’s friend (let's call him Mr A).

I shared all this info with Mr A without an NDA because he was recommended by my friend who is a very trusted person.

Mr A looked at the code and said it won't work. He also mentioned that he can try and find a solution for this problem himself.

So we had a meeting and discussed the terms if Mr A is able to find a solution to the problem by writing code that can solve the problem.

We agreed to be partners and launch this product to the marketplace with equal ownership (50-50).

My responsibility was design, support and marketing while Mr A would do the development.

And with that Mr A starts writing the code while I work on other parts.

A couple of weeks go by and MR A is hitting roadblocks and starts to complain about how hard this problem is.

I kept encouraging him and showed a lot of patience as I know how hard the problem is.

A couple of months later he finally solved the problem as he found a way to do it.

As soon as he has solved the problem, his demeanour shifts completely.

Now he wants me to sign an NDA and also he casually mentions that he had this idea before and it's not a new idea.

When we met initially he did not mention any of these things.

Also, I am sharing info with him as well which is why I asked him for a bilateral NDA but that was also refused as he only wants to do unilateral NDA with me since he believes code is proprietary while other parts of the business that I am going to share with him (marketing strategies, business secrets etc) are not.

And now he also suggests that the launch that we both are going to be part of needs to hit a certain amount of sales ($100k) otherwise he should be able to take this idea + code elsewhere and launch it on his own (and should own 100%) even though we initially agreed to be 50-50 partners.

So here is my question to those who really know this stuff,

Do I really have no rights here? Because Mr A keeps saying that legally I have no rights because he owns the IP to the code because he wrote it and I am free to consult a lawyer (which I am going to soon).

However I believe that I shared the idea and initial code (even though it was not used), I should be the equal owner of this (as it was agreed initially) because we had a verbal.

What would you suggest I should do in this situation? Or better yet, what would you do if you were facing this issue?

Do I really have no rights here as Mr A says?

Kay Z
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What would you suggest I should do in this situation?

Do not sign the NDA and do not get intimidated by Mr A. Instead, think about how you can prove the terms you two already agreed.

Mr A is trying to override the initial agreement with one which clearly is more favorable to him. Your problem is that proving the terms of a verbal agreement is quite difficult, especially once the counterparty's/partner's attitude has worsened that much. This is why you two should have signed a contract at an earlier stage.

Hopefully at least some your communications with him are in writing, since the substance of those records might support your account of the facts and therewith a fact-finder could infer the terms of the initial agreement. In those communications Mr A might have inadvertently said something that weakens or defeats his legal position.

Depending on how much your friend knew about the matter, you might also want to secure an affidavit from him, any written communications you had with him in that regard, and also ask him (in writing) to preserve records of any communications he has had with Mr A from the time your friend was making the connection that led to this partnership.

That being said, it is important to emphasize that these lines of action will be unavailing if you agree to Mr A's new terms.

Iñaki Viggers
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  • Thank you for the detailed response. Appreciate it. I do have a lot of communication in writing via Skype where Mr A has already mentioned the idea was provided by me. Would that make a stronger case for me? I will be recording the entire chat just in case Mr A decides to delete the chat. – Kay Z Jun 03 '21 at 20:55
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    The statement of the problem seems to have originated with you but the actual solution seems to have originated with him. The objective relative value of those two contributions would be hard for anyone besides you two to quantify. Your verbal agreement that values them equally is what you have that shows you two had equated the values. If you give up on asserting the centrality of that agreement and think things will be settled by some third party weighing your contributions I do not think you will come out well. – George White Jun 03 '21 at 21:16
  • @KayZ "Would that make a stronger case for me?" Yes, in part because those communications defeat his belated allegations that "he had this idea before". Also because his contradictory statements tend to weaken his credibility altogether, a crucial issue that the fact-finder/jurors have to assess when deciding controversies in the absence of conclusive evidence such as a written agreement. In turn, this helps establishing what George White pointed out: a showing that "you two had equated the values". – Iñaki Viggers Jun 03 '21 at 22:18