Adam Hinkley's IP Hindsights
Posted by
timothy
on Mon Apr 09, 2001 12:12 PM
from the twenty-twenty- dept.
from the twenty-twenty- dept.
spam-it-to-me-baby writes: "Adam Hinkley started out as a bright 17-year-old Australian software hack with a good idea. Now he's 22, broke, and has lost all his intellectual property after being crushed by the multinational software company that first took him into its folds and then dragged him through the courts in an at-times bitter and protracted battle. He has a few words of warning for any other young mind thinking of starting off down the same path." Sobering, but it looks like Adam has been able to shrug off the ruling with admirable ease. Learn from what he says.
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Adam Hinkley's IP Hindsights
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Re:One word. (Score:3)
Of course, the political party in question was not the one most of the employees voted for, so he blew the whistle on the unionized employees who, got pretty pissed-off at it. To make a story short, the company owner's got his Mecedes torched, his office was smeared with grease and other gooey disgusting stuff, his lawn sprinkled with pesticides and fertilizer at different places, and plenty of the employees who "gave" to the political party went to the political party to demand their money back, and my friend provided information about all this to the Elections Supervisor office, who promptly laid charges against the company and the political party (the candidate was later convincted of election fraud for paying people to vote several times for him).
The company, each director, the political party and the candidate were each fined six times the amount of the "contributions", it's directors and the candidate deprived of civic rights for 10 years (they can't vote and can't present themselves as candidates to elections),
Better yet, the insurance company didn't pay a cent for the torched Mecedes, as it was able to allege that the owner deliberately torched it himself to commit insurance fraud (the owner didn't bother fighting this as he was entangled with the bigger legal problems with the Elections Supervisor), and when my friend was fired for blowing the whistle, he successfully went to court and was reinstated with indexed back pay (the case took two years). And the company had to keep his replacement, too.
So, as you can see, in a Socialist country, democracy cannot be corrupted easily, and the workers cannot be screwed either.
(there. Score: 5: flamebait+3, troll+2)
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A few words of advice (Score:3)
Now I may sound like an old fart - which I guess I am at 30 - but from you comments it seems that most of you have a lot to learn about business in general and software publishing in particular.
I see a lot of misconceptions here, so let's start with the biggest one right away:
It seems that most of the people commenting on the story think that the "idea" is the main thing in getting a software company up and running. Not so! As a rule of thumb, the idea is 5% of the program. The program is 5% of the product. The product is 5% of the company. In other words: While it's certaintly true that without the idea there would be no company, it's AT LEAST as true to say that without a lot of (non-idea and programming related) work there would be no company either.
Coders tend to underestimate the importance of the supporting organization and the networking involved in getting a product to the shelves, not to mention selling it once it's in the stores. It's true that a lot of barriers have fallen in this area over the last years, but the main part of the job is still to get the software ready for the market, and actually getting it TO the market. In other words you (OK, we) tend to overestimate the value of ideas.
In the area of ideas: You do NOT need a brilliant idea (although it won't hurt). You need a good idea and a good plan. Without a plan you'll get exactly nowhere. Have you thought about distribution? PR? User segments? Competition? You NEED to think about those things, in order to find a way to package your IP in a product that will actually stand a chance of making money.
The last major misconception is in the area of the nature of business deals. It seems that a lot of people are outraged that he got "screwed over". Well guess what: People do not do business in order to be nice to eachother! They are out there to make money, and if you do not make sure that your ass is covered, the easiest way to make money will be to "screw you over". That would be your fault for not getting a good lawyer to check out the contract before you signed it, and not their fault for being evil capitalists. If you don't want to deal with capitalists, don't invite them in. If you don't want to deal with them, and your product needs financing to take off, your plan wasn't good enough :) In that case, bite the bullit and cross your fingers, 'cause there's no way to make sure that they can't screw you over somehow.
Finally you absolutely have to quit your day job in order to give your own idea the 110% attention it needs in order to become a moneymaker. You can NOT expect to make a fortune in your spare time. Actually your prospective investors expect that you spend at least half a year working on your idea ON YOUR OWN DIME... If you don't, well then you haven't shown sufficient confidence in your own ideas, right? They supply the resources, but you have to make them bellieve in you somehow.
To sum it up: Don't bitch - learn about the facts of business before you try to play in the big (or middle) leagues. Unfortunately the only reliable way to learn about business it to try it, so expect to get burnt once or twice. But it's no big deal.... You'll learn, and eventually (hopefully) you'll bag the big one some day.
Just don't count on doing it through amazing code alone, or expect that the venture capitalists are in the fairy godmother business.
Re:We need a unified front (Score:3)
Not true. I insisted on something very much like that in my most recent contract. It depends how much they want you, and for tech people with any skill at all, remember you're in the driver's seat. Think of this little freedom as a benefit the company can give you for free. If you had two equivalent offers but one of them explicitly acknowledged your rights to your off hours, non-company related work, which one would you choose? In my case, and I think this is a technique that will work generally, I said that I was involved in a number of open-source projects and I needed written assurance that my employer would not make any claim on the work I was doing there. Since your employer is most probably benefitting from the open source work you're doing you'll find it an easy argument to make, and it doesn't sound like you're planning to run off with the company's IP. Finally, if you don't ask, you won't get.
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Re:Young enough to start again (Score:3)
Re:Heed him (Score:3)
Not to say you can't trust them. The point is, the first time you suspect that you CAN'T trust them, you shouldn't ever trust them from that point on.
Sorry. I've been burned before.
Bittersweet advice...
Don't have good friends as roommates. Sure, you want to KNOW the person and you want to be able to get along with them, but nobody can get on your nerves quite like a GOOD friend, and they're a lot harder to kick out if things go sour for some reason.
Don't lend money to friends if you expect to be paid back. If they pay you back, thats an act of good faith on their part that shows their quality. If they don't, you have every excuse not to lend money to them again. Otherwise, that loan will become a tension point and you'd have been better off never lending it to them in the first place.
Don't go into business with anyone who doesn't seem to have a firm grasp on reality. Buisiness that boom overnight are rare, and even more rarely predictable. A friend might have some glorious plan for becoming a millionaire overnight and want you to quit your job and put in 80 hour weeks to help him realize his dream and reap the benefits. Don't hesitate to be the rational mind in the situation. Even if he believes what he's saying, you'll still end up throwing a lot of money and time at a black hole.
However, a sobering business plan, with modest investment, and a reasonable expectation of profits after a period of time that isn't based
on a quackjob theory, THAT might be something that interests me. Sure, it doesn't sound like its got the potential to turn me into an overnight millionaire, but at least I'd have better faith in the chances.
-Restil
Adam's comments (Score:3)
I am just sorry that he learned them the hard way. If you, (Mr/Ms) Slashdot reader, read no other story today, please read Adam's four warnings [hypermart.net]. Understanding or at least accepting them can literally change your life as a techie.
As somebody else once said, "This is no-shit serious".
Re:Young enough to start again (Score:3)
Give a poor man a million dollars, he will remain a poor man.
A scary number like 80%+ of all large-prize lottery winners go bankrupt within a few years. Most have no understanding of how to make that money work for them, or to turn it into a renewable resource through wise investment. They spend the $100k/year, even selling the future years' checks before they come in.
Re:Young enough to start again (Score:3)
Well this version is considerably less unpleasant than the first.
Although like that other US saying to be found in many bars "if you are so clever why ain't you rich", I would have to say that if a man was wise perhaps he would have no need for a million dollars.
Phil
Re:Some Balance to this old Story! (Score:3)
1) They didn't back up the source.
2) They left the source entirely in the control of one person. Say he skis head-first into a tree, then where are you?
3) They knew he thought he was being screwed over, and they still didn't back up the source!
Young enough to start again (Score:4)
It is just gutting when your sole vision in life for 5 years is cruelly crushed by large non-feeling corporate entities. But what do you do? Join them, or go against them?
Posta Firsta (Score:4)
when you are a kid, you would probably be more likely to share the profits a bit if it would enable you to act as an adult with your property through this corporation, rather than getting taken advantage of at a young age.
Thoughts upon Adam Hinkley & his actions (Score:5)
Next a few things to ponder upon:
Adam Hinkley sold the rights to his code. He did this without duress & in an apparently legal fashion. He took the money (ok, stock too.)
Later he disagreed with the direction the company who had bought his code was going. Fair enough, it's not unusual for an inventor/founder to become unhappy with the future course of their product, particularly when they've sold control of it.
However Hinkley's solution was to encrypt the source-code for the application & refuse to release it to those who had paid for it. Now I don't know about the rest of you but had I paid someone some large sum of money for the rights to a product then employed them under contract to extend the product I would expect it to be mine. Again Hinkley took the money.
Later (as I recall) it is discovered that Hinkley had apparently misappropriated OTHER code that he'd been previously hired to develop by a previous employer, renaming & reusing it without their permission.
I don't know how other folks view this but when most companies hire someone to write code they expect it to belong to them, not to wander out the door with the employee.
Generally this is clearly spelt out in the employment contract and yes generally the folks who paid for the code get to determine it's license, if any. Sure skills & techniques & code snippets & even architecture go with the employee but not the whole ball-of-wax, line by line to be used in another companies' product.
Yes Adam suffered some devastating personal events. However none of those have any direct bearing on his being compos mentis and signing contracts. At some point one has to take responsibility for one's decisions, for ill or for good.
Finally note that Adam did not do this all without advice. His father assisted him in the decisions, was involved in running his business, and they did hire lawyers to help write & review the legal instruments.
Adam had every opportunity to refuse to sign the paperwork, to demand things be put in writing, to simply not go ahead with the deal. However he didn't. He sold his product.
Frankly it all reads to me as a greedy young man who had a good idea, sold it, then when he realized he'd lost control regretted it & attempted to renege on his obligations. It's great that he was so committed to the product, a pity he'd sold away his control of it. That the courts have not backed him up is not surprising, he has shown little reason for them to do so.
What's the lesson to be learned from all of this?
- Be legally smart.
- Understand what one is getting into.
- Realize that when something is sold it no longer belongs to you.
- Understand that one can't later renounce contracts.
- Accept that there are no legal 'outs' for personal disaster; distraction & grief are not sufficient to invalidate one's commitments.
- Respect that if one is capable of signing a contract one is expected to honor that contract.
- Take responsabilty for one's actions and fulfill ones obligations.
After Adam Hinkley sold his product to Hotline he was no longer it's owner. This was trivially clear beforehand whether he recognized it himself or not. That the company may have different goals & directions for Adam's product should have occurred to him earlier & provisions been made. Without those he was simply another employee with a valued position, a paycheck & a block of stock. To attempt to then hold material hostage in order dictate terms to the new owners was stupid & illegal. To attempt to remove the materials to another jurisdiction was even more stupid. That the legitimate owners of the material were forced to bring in the law & have a search made to return their property was sad but justified - the code was theirs as much as any other corporate asset, physical or intellectual.Sob stories make for interesting reading but aren't particularly compelling. Perhaps next time Adam will have matured a bit & treat going into business with the seriousness it requires, respect the implications of signing a contract.
Finally, here's the only source-material I could find: HL Afterbirth [macrules.com].
The Hotline Saga (Score:5)
It's been a while, so I don't remember the particulars of this case exactly.
Adam was a kid who wrote hotline, a very sophisticated client/server filetransfer/chat app, which very quickly was picked up by the warez community. It was light years ahead of anything in the field (this was 3(?) years before Napster, to put things in perspective).
Due to the popularity, a group of businessmen decided to fund further development of the app...Adam joined them, signing over his code. He moved to canada and worked on the project. Eventually, though, he realized that the business people were screwing him over. After trying, naively, to get them to change their ways, they reminded him of the contracts he had signed regarding his code. Adam suddenly realized that he no longer 'owned' his code. To make a story short, he PGP encrypted everything on the computer he was using and flew back to .au.
The company was forced to reverse-engineer hl, resulting in version 1.6 (1.7?) or so, which included banner ads and a PC version. This was the death knell of the hotline community, which finally degenerated to the land of w4r3z kiddies it is today.
And now, at 22, Adam's ready to take on the business world again. Go Adam! Kick some ass!
We need a unified front (Score:5)
1. Information and inventions that you are exposed to at work are property of the company, and will not be disclosed without permission.
2. External projects will be performed only off-site unless you are instructed otherwise. No company resources will be used.
3. Off-hours work and inventions are your own.
4. If you're asked to deploy your own off-hours software for business, changes made will be contributed back to the project under the terms of that project's license.
5. In terms of non-competition, software that is used by a competitor, but which does not directly engage in the business of your company will not be considered to be a violation.
Having this, we could then present this to prospective businesses in order to take the pressure off of them to come up with a way to cover their asses. They get a document which the industry has had a chance to review an comment on so that they know what to expect.
Thoughts?
Re:Posta Firsta: Business for Nerds (Score:5)
This is true - your best ideas will probably come while you are young and in school, and working for a corporation will narrow your explorations, and probably steal your best ideas. If you want to make the big dough, and don't mind taking the big risk, start your own company.
Having said that, I still believe post-college is the way to go. If you fail, or the industry collaspes, you will have a degree to fall back on. If you suceed, you will have at least sat through the mandatory lectures, so that you won't get lectured on Slashdot on proper list creation, database design, or basic security.
Roblimo wrote an article earlier today that showed some real business knowledge in the minds behind Slashdot. They've been at this game for a while, and now do what they love for a living. It would be nice to have a series of articles, something like "Business for Nerds, Stuff that Doesn't Seem to Matter But Actually Does", and make it a linked column, rather than a Slashdot post, so that it doesn't get lost in the archives. Something like the FAQ, but updated, and with years (I'm getting annoyed at only using the month and the day as a date stamp on Slashdot posts - how short sighted).
So this is why Hotline started sucking... (Score:5)
It was great at the time, because you didn't have to do the hunt and peck thing with Hotline, or beg for rare tracks on usenet. You could find what you want, frequently by the server's name and/or theme, and then try to upload in response.
Of course, getting a stable version out for Win32 destroyed this rather friendly exchange for the same reason that all of AOL's millions of users make it difficult to use what would otherwise be a pretty good service. People began to use Hotline to try to make money and run scams. Most HL servers, I suspect, are fronts for banner schemes now. These schemes are probably seen by advertisers as part of the primary reasons why the banner market is so unsafe.
I find it ironic that the application's creator was screwed over for the same reason that it's users were: GREED.
I'm glad that he didn't pursue. I don't think it would have been worth his time. Personally, I hope he starts out and creates another great, innovative, killer app.
Re:Young enough to start again (Score:5)
Give a poor man a million dollars, he will remain a poor man.
Take away a million dollars from a rich man, he will make another million dollars.
The point is, this guy seems to be very intelligent, so I'm sure he can move on with his life and do quite well for himself. Looks as if youthful enthusiasm has now been tempered with the cold steel edge of the real world. Although his message is a little jaded, he seems to have adjusted well to the change, all things considered. Good luck, buddy!