source — unsplash

Startup trouble

This is a sample case to try your strength in understanding issues that might arise before a startup. All of it is a work of fiction, any similarities to the real world are coincidental or used for illustration.

Feel free to use and change this text. I would also be grateful for any feedback in regards to the structure and contents of the task.

The task is to find and flag the legal issues and provide some general explanations about them.

Approximate time to finish the task — 40–60 minutes

About the company

We are “AI game lab”. An innovative company creating a revolutionary artificial intelligence for gaming.

Ouf founders have extensive experience in both game development and artificial intelligence, have finished top universities, where they also worked on some project related to AI and video games.

Each one of us decided to quit our respective companies to pursue our passion. Although we have a lot of desire to build our own company, we don’t really have that much experience in legal issues.

We have already started working on the development of our product which we want to call “Wittgenstein”. Ping and Johnny are doing most of the coding, while Andrii is managing the projects and communication. Most of the code is written inside the team, but we also rely on open-source solutions.


Ping Chan (China)

Education — Beijing Institute of Technology

Work — IBM watson

Johnny Doe (USA)

Education — Mit.

Work experience — IBM Watson development team.

Andrii Kot (Ukraine)

Education — Cornell University

Our AI is going to do a couple things

  • It provides the game with an adaptive artificial intelligence which learns according to how the players interact with it over time.
  • Gathers data from the players to provide a personalized environment and also to develop the AI across the whole system.
  • Provides the game developers with more information and metrics about how the players behave while playing to inform further development process.
  • We are also thinking about opening some access to our AI through cloud services to allow various users to train it and use it in a limited capacity for their own projects

Since most of our work is focused on the development of the AI, we have outsourced the development of the website and design to a number of developers in Ukraine and China.


We have recently been approached by a number of investors with suggestions ranging from a small convertible note to a complete buyout. The Due diligence has not yet started however.

We have not incorporated yet and would love to hear suggestion from you as to what we should be thinking about for the process of incorporation.

What we need from you

  • We would like to understand what IP we need to be thinking about and how to protect it.
  • Are we missing something? Do you see any problems in our current approach?
  • Are any kind of legal action you could recommend at this point?
  • Should we be worried about our previous employment in any way?
  • What should we think about when incorporating?
  • Should be we be worried about infringing someone else’s IP? What do we do?

Keep in mind

  • We have hired multiple legal teams to review our situation and will then compare the results. On the basis of those results and upon our discretion, we shall decide who to work with
  • We will assess you dedication and our perceived quality of your work over the allocated time as well as comprehensibility and your ability to answer our questions
  • At this point, we are not expecting the perfect solution to every problem, but rather looking for a team that would understand it and all the legal issues related to it
  • Up to 2–3 teams could be hired, if we consider, that they would provide a good service for the company, so you can also consider joining up forces