If you are planning on leaving your current place of employment, and starting up a company potentially using your former employer's IP, do yourself a favor.  Don’t leave an IM trail!

That’s definitely the moral of this story [via Techdirt].  The basic story is that Lance Tokuda worked along with Jia Shen at Iconix, an email authentication/identification service.  While at Iconix, they made plans to form RockYou, a web 2.0 photo-sharing/myspace tie-in site (etc.).  In short order, the site had over a million users and attracted funding from Sequoia Capital who put in approximately $1.5 million into the company.  There was a slight snag.  As reported in the article, Lance Tokuda and Jia Shen, the employees of Iconix, who went on to found RockYou “made the mistake of corresponding via IM about their plans”. 

A federal judge in Oakland recently granted Iconix’s request for an injunction [pdf version of the Order here], finding Tokuda (et al.) violated the terms of their proprietary inventions agreement signed with Iconix.  One of the issues was whether Tokuda and Shen developed RockYou on their own time or while on the clock for Iconix.  Tokuda and Shen left a serious trail of instant message conversations which they had logged on their computers.  Those messages left little dispute that they had put significant time and energy into RockYou while supposedly working at Iconix.  You can access a substantial portion of the logs, which were filed as an Exhibit to Iconix’s request for an injunction here [pdf].  I wondered where Iconix obtained these logs, thinking it’s not so easy to subpoena logs from ISPs.  It turns out these logs resided on the computer used by Shen – which he left behind with the logs still on it when he left the company!

The decision is interesting on a number of levels.  Least of all, it seems to allow California employers to cast a wide net around the extracurricular activities of their employees.  (California is thought to be a freewheeling state, from the perspective of employees.)  From my read of the injunction order, Iconix found the source code for the RockYou service on Shen's computer, registered the copyright in Iconix's name, and then sued under the copyright.  An awkward result, to say the least.