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I suggested an idea to my boss. He didn't show much much interest to build it, so I did it on my own. Now it is at the verge of getting funded from VC. My boss now interested in executing the project.

Would there be any IP violation filed by my employer since the idea was originally pitched to him during my employment with the company?

I don't want to damage my relation with my employer.

You can't retract work done while being employed at X. Your pitched ideas, I assume under your current laws, are part of this work.

That being said, talk to a lawyer. If the law says you own 100% of your invention, you can approach your boss notifying them about that. And get ready to lose your job.

If the law says your employer have special rights (e.g. can embargo any movement forward) then you have to approach that as such:

Hey boss there is a situation. I think I made a mistake by not talking to lawyers earlier, but how can we resolve this? I want X and Y to happen and want not to go to court.

Most importantly:

Talk to a lawyer. If your VC investor discovers there are extra "wrinkles" attached to the company you started, you will lose a lot of money. Maybe end up in court for hiding important information from investor

Would there be any IP violation filed by my employer since the idea
was originally pitched to him during my employment with the company?

You don't state where you are located, but very probably. The company may claim it as "work product", even if you did it on your own time with your own equipment. It really comes down to what your employment contract says on the matter (and to an extent any company handbook / rules etc). Many contracts have an explicit clause which states that any product created whilst employed by them belongs to the company.

Of course, they can claim and file suit for anything at all; that doesn't mean it will succeed, but doing so has been known to be used to mire a small competitor in legal delays and costs until they go out of business.

I don't want to damage my relation with employer.

Who does? But you can't make an omelette without breaking eggs. Try to minimise the damage without conceding too much of your new product.

Advice (and take your time to think this over, maybe with lawyer, because I'm really just guessing).

You need to remind your employer that they should focus on their business, rather than just one little part which may contribute towards it. They buy in stationary and tech equipment; They buy in (lease) their operating systems rather than write them. Your product should be just another line item on their quarterly outgoings.

Of course, if there's real money involved (and I'm guessing so if you're looking at funding), they will probably want to own it to add that to their own revenues.

This could be a good opportunity to suggest that they become an investor; Point out that if they own a stake in the business, they have a degree of control over it and can take a share in the profits. As the main customer they can also request features and changes (all customers will do this anyway, of course).

Give them the opportunity to buy in now at $$ for x%, with the option to buy a larger amount / all later, when the company is worth tens of millions.

This won't be easy if they think they can get your product by simply laying claim to it, or threatening your job, but nobody wins that way; You need to pitch this such that everybody wins.

There is no intellectual property in ideas. Ideas on their own are worthless. Only ideas plus effort create value. Whatever work you did, plus getting close to funding, that's value.

That said, you told the boss your idea, and now nobody can stop him from using it. As I said, ideas have no protection at all. You can leave the company and run with your idea if that is what you want. But if you want to stay, and if your boss asks you to work on that idea, there's not much you can do about that.

Ideas are worthless, execution is what matters. And the company might have a claim to the execution.

Normally, employees are forbidden from competing with their employer during their free time, and there are already arguments that go both ways:

• By making the pitch, you implicitly admitted the idea is something your employer would pursue.


• By initially rejecting the idea your employer implicitly admitted the idea isn't something they would pursue.

Additionally, sometimes there are clauses that state anything you created while employed belongs to the company. Those are not always enforceable, and never unrestricted - and even if they apply, they might allow you to claim vast amounts of overtime.

As you can see this does get complicated, and you need a lawyer. But don't worry, these kinds of conflicts are usually resolved in negotiation, not court. This does not have to end up damaging your relationship.

One approach is to offer the current company to buy your work, or enter into a joint venture - an offer you will need to discuss with your lawyer before you make it.