[TX] Who owns software created under an informal business partnership with no written agreement?

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TJ, Esq.
TJ, Esq.

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Don't contact the dev team yet. You're right that moving too fast could trigger the other founder to act defensively, and you want the patent filed first. Right now your silence is an asset. The bigger issue is that without a signed agreement between you and the other founder, and with your unofficial business name never formalized, ownership of the code itself is murky.

Under federal copyright law, who owns a piece of software that more than one person contributed to often comes down to whether it counts as a "joint work" or a "work made for hire," concepts defined in (17 U.S.C. § 201). You created it, but he funded it, and that's a mess courts have to sort out.

The NDAs with contractors help protect against them sharing your work, but they won't stop the other founder from claiming ownership or continuing development if he can convince the dev team he has rights to it.

Your best move is probably to wait for counsel before doing anything with the dev team. Once you have legal guidance and the patent filed, you'll be in a much stronger position to either negotiate with the other founder or take action to block him from using the code. Moving now could backfire.

When you formed your new LLC, did you take any steps to document that the code and materials belong to you and not to your unofficial business name or the other founder?

Texas Non-Disclosure Agreement (NDA)

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Hello, I just upgraded to talk to a human lawyer rather than AI, are you human? lol

user
Lexi
Lexi, Chatbot

I understand that you're looking for a more personal touch in your legal assistance. What specific legal issue are you currently facing?

Good afternoon, a few months ago, the other founder involved in this project, who is based in another state, reached out to me based on my AI/tech expertise to build a one-click AI program for attractions. His contribution largely began and ended with the original concept and providing the larger part of the funding. I created the software/program with contractors we hired and served as the main technical contact, handling contractor NDAs and communicating directly with the dev team. The other founder and I are now in conflict. I have documented instances where he misled potential clients, created fake emails, and pressured me toward business practices I believed were improper. After I pushed back, he said he was "going in a different direction" and "moving on."

I have not responded to his latest email while I consult counsel. My concern is protecting the code, model, UI, workflow, and project materials I created from unauthorized use or claims, especially since he has already shared the pipeline flow with third parties and other AI specialists. I have screenshots, NDAs, message threads, a patent form, and a timeline. I am also forming a new LLC and want to make sure I handle this correctly. My main question is whether ignoring him for now is still the safest move while I wait for attorneys to respond.

user
Lexi
Lexi, Chatbot

Have you already taken any steps or actions regarding this issue?

I've contacted attorneys but they have not contacted me back yet, but nothing else has been done that isn't already described in the above summary.

user
Lexi
Lexi, Chatbot

Is there anything else the Lawyer should know before I connect you? Rest assured they'll be able to help with your conflict with the other founder.

No that's great I think. Thank you.

user
TJ, Esq.
TJ, Esq.

Hello! My name is TJ, and I'm an attorney with over 20 years of experience. Thanks so much for the opportunity to assist you!

Hello, TJ. Good to meet you, and thank you for your assistance ahead of time.

user
TJ, Esq.
TJ, Esq.

No written agreement on IP ownership. He's been vague about whether he'll continue using the program, but he's already shared the pipeline with others. What's your sense of whether he has the technical ability to use or modify the code on his own, or would he need developers to do that?

He would need the dev team to do that, but he has the means to make that happen, likely with the dev team we contracted, who are working on it now (I have not opened my mouth to anyone about leaving this project, except to my new business partner and longtime friend).

user
TJ, Esq.
TJ, Esq.

That's a real problem. The other founder can likely hire the same dev team to continue building on your work, which means you need to move fast on IP protection before that happens. Your NDAs with the contractors are crucial here, and you'll want to assert your ownership claims before he does. Did the dev team sign NDAs that specifically restrict them from working on the project for anyone else without your consent?

At the time we were doing business under an unofficial business name, which we never made legally official (like LLC paperwork, though I don't know what he did behind my back). So, the NDA is made out for that unofficial business name, but I am the only one who signed it from this side; the other founder did not sign it. And that is actually the only legal document that I think has a signature on it. I don't think we even officially signed with the dev team. Should I approach them and just offer to pay the remaining balance and tell them to leave the other founder out of it? My fear is that if I become confrontational before I submit the patent then that would trigger the other founder to become more aggressive. Right now, he just thinks I'm lazy or ignoring him, according to his words in an email, so that is playing in my favor right now as he has no idea what I'm actually doing.

user
TJ, Esq.
TJ, Esq.

Don't contact the dev team yet. You're right that moving too fast could trigger the other founder to act defensively, and you want the patent filed first. Right now your silence is an asset. The bigger issue is that without a signed agreement between you and the other founder, and with your unofficial business name never formalized, ownership of the code itself is murky.

Under federal copyright law, who owns a piece of software that more than one person contributed to often comes down to whether it counts as a "joint work" or a "work made for hire," concepts defined in (17 U.S.C. § 201). You created it, but he funded it, and that's a mess courts have to sort out.

The NDAs with contractors help protect against them sharing your work, but they won't stop the other founder from claiming ownership or continuing development if he can convince the dev team he has rights to it.

Your best move is probably to wait for counsel before doing anything with the dev team. Once you have legal guidance and the patent filed, you'll be in a much stronger position to either negotiate with the other founder or take action to block him from using the code. Moving now could backfire.

When you formed your new LLC, did you take any steps to document that the code and materials belong to you and not to your unofficial business name or the other founder?

We are forming it now, it is not finalized, and I was having verbiage put in that the code of the program and the program itself is solely mine, unless you think I should hold off on that right now?

And I wanted to make sure you know he didn't solely fund it. I put in a bunch of money of my own in forming the websites, the UI, and some of the tech needed. He certainly paid for the first have of the contractors but I have also put in funds, and I have no problem buying off the rest of the contracting work.

user
TJ, Esq.
TJ, Esq.

Hold off on finalizing that language in your LLC documents until you talk to your attorney. Here's why.

Right now you're in a position where you can argue you created the code and own it, especially since you put in your own money and did the technical work. But the moment you put language in your new LLC claiming sole ownership, you're essentially admitting there was a dispute about it in the first place. That can look defensive and might actually invite the other founder to make a competing claim before you're ready.

Your attorney needs to see the full picture first. They'll want to know exactly how much each of you invested, what work each of you did, what he was told about ownership, and whether there are any emails or messages where ownership was discussed. Then they can advise you on the cleanest way to document your ownership going forward without creating problems.

The fact that you invested your own money and did the technical work is huge. That strengthens your position. But you don't want to telegraph your strategy to him by suddenly changing your LLC documents or making moves that signal you're preparing for a fight. Let your attorney guide this.

On paying off the remaining contractor work, same answer: wait for counsel. They might want you to do that, or they might want to handle it differently. Either way, it's a move that could be read as taking control of the project, which could spook him into acting faster.

Your instinct to stay quiet and wait is the right one. Does that make sense, or do you have concerns about waiting on these decisions? Thank you for bringing me into this.

That makes sense. Thank you so much for your assistance. Pardon my ignorance, as this is all new to me, but how long does an attorney's office normally take to respond to an inquiry? I contacted three attorneys on Thursday, and I have not heard anything back. Should I contact a bunch more then? Thank you for humoring my silly questions lol.

user
TJ, Esq.
TJ, Esq.

Not silly at all. This is actually one of the most common frustrations people have when they're trying to get legal help.

Response times vary a lot depending on the firm and the attorney. Solo practitioners and smaller firms might respond within a day or two, but mid to large firms can take a week or longer, especially if they're busy or if your inquiry lands in a general intake email that doesn't get checked daily. Some firms are just slower than others. The fact that you haven't heard back since Thursday doesn't mean they're not interested or that your case isn't worth their time. It just means they haven't gotten to it yet.

That said, it's not a bad idea to reach out to a few more attorneys while you wait. You're not locked in with the first three you contacted, and having options is helpful. When you do contact additional attorneys, keep your initial inquiry brief and clear. Mention that you've already reached out to other firms and are looking to move forward soon. That sometimes lights a fire under people to respond faster.

Another thing worth knowing is that some attorneys will want to have an initial consultation call before taking you on, and some will want to see your documents first. Be prepared for either. When someone does respond, ask upfront about their fee structure and whether they offer a free initial consultation. That'll help you figure out who's the right fit.

In the meantime, keep gathering your materials and organizing your timeline. That'll make things move faster once you do connect with someone. Did I cover what you needed to know about this? Thank you for letting me help you think through this.

Yes, you have been a great help. Thank you so much. Enjoy your day!

user
TJ, Esq.
TJ, Esq.

You're very welcome, and I'm glad I could help! Feel free to reach out if you need anything else.

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