As other monks have pointed out, you need to get a lawyer immediately. IANAL, so consider the following simple common sense that the lawyer will undoubtedly reiterate.

First, stop your friend from doing any more work on the project and communicate to him very directly your concerns. If he's a real friend and you stop working with him now, you may be able to salvage the friendship. If you don't, you will undoubtedly lose the friendship and possibly much more.

Next, document document document.

Before your memory starts to fade, write down in as much detail as possible

• When you met (either by phone or in person)
• Who was at the meetings
• What was said at the meetings and by whom

Also make sure to preserve a copy of the check and bank statement indicating that they cashed it as well as any invoicing they provided and any even remotely related documentation including memos, e-mails, or other communications between yourself and others concerning your idea particularly if they occured before the contact with your unscrupulous friend. Gather and organize the documentation for easy access, and make 2 copies: One for your lawyer and one to keep off-site in case of unforseen circumstances.

This will protect you in 2 ways. First, you will probably want to get your $1K back (if anything, to defray the cost of the lawyer you're going to hire). If you go to small claims court, you will need to show a breach of contract or somesuch.

More importantly, however, if your idea is worth something, you need to establish with as much certainty as possible when and how you communicated the idea to them. If they try to expropriate your intellectual property, this will serve as the basis of any legal action you take against them.

This kind of intellectual property theft is not uncommon. Heck, Bill Gates has been accused of much the same thing with respect to the conceptual underpinnings of Windows (though his expropriation of others' ideas has been largely successful so perhaps he isn't the most encouraging example).

Best of luck to you. At the very least, you will have learned a great deal from your experience.

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