This article is presented by Alica Levy of The Levy Law Firm
Alicia is an accomplished business lawyer and great resource
to local startups.
Many people have new business ideas, however they do not have the funds to put the idea into action. They then want to meet with investors or others in their community to find money and get their business going, but they are worried that someone may steal their idea.
While your idea certainly can be stolen, it may not be too big of a concern and there are things you can do to protect yourself!
Common things people often think of when wanting to protect their new business ideas are; patents, trademarks, copyrights, and using non-disclosure agreements. I am going to go through a brief overview of when they may or may not work and what you should be doing.
A patent can only be used with an invention. This invention must be novel, non-obvious, and useful. A novel idea is something that no one else has come up with. For example, Facebook cannot be patented because MySpace already existed. While they are different from each other; Facebook is not novel. This is a fairly hard test to pass and most internet or online business probably won’t be seen as novel.
Your idea must also be non-obvious. Back to my original example, Facebook using a cleaner sleeker method of communicating with friends is likely an obvious fix to MySpace, which was becoming a bit cluttered and less user friendly. Since, Facebook may have been seen as an obvious fix then it is unable to be patented. I am providing fairly simple examples, but do keep in mind that Patent law is quite complex and involves certified patent lawyers (which I am not).
A patent must also be useful to society. It cannot be something found in nature, such as a mathematical formula, it cannot be illegal, and it cannot be a non-operable machine.
A patentable idea must also be on it’s way to invention status, which generally takes the money you are looking for in the first place! If you were able to get money from family and friends and begin inventing then you will be further along than most. In order to get a patent you must have a detailed description, an informal drawing, and a one page cover sheet. This will give you a provisional patent application that will then allow you to work with investors and others for one year to more fully develop the invention. The farther along you are when you get this provisional patent the better, because a year is really not that long.
A regular patent application requires an abstract or summary, an itemized list of the patent claims, a disclosure of all relevant or similar work that you now of, and a declaration which states that this your invention and you did not steal it.
A trademark is a word, symbol, or phrase that identifies a certain company or product. The swoosh symbol on a pair shoes allows the consumer to know that Nike developed the shoes, the swoosh symbol is a trademarked symbol that Nike uses on its products.
Trademark registration is the easiest way to protect an internet business. This will help stop people from opening a business with a substantially similar name or identifying mark.
One important thing to know is that a trademark does not have to be registered with the federal trademark office. If you are the first to use the mark in commerce you can use the trademark symbol and be protected fairly well. There are more protections granted to those who register, however if you are just starting out, saving some money on registration might be worth your while. The TM symbol lets people know that this is your unregistered trademark, however the R with a circle around it lets people know that it is a registered trademark. Make sure not to confuse the two.
Copyrights apply to writings, which has a rather broad meaning and can apply to all works of authorship fixed in a tangible medium of expression; this consists of photography, art, graphic arts, software, motion pictures, and sound recordings, plus more. Copyright registration is voluntary. You can put a copyright symbol on your website or business plan to help protect it.
Discussing your Idea
When discussing your idea with potential investors or just people in the community to get a better idea of what might be needed; it is important to not reveal too much information. However, keep in mind that an idea is just that, an idea. It is fairly useless and only becomes useful when someone with time, energy, and resourcefulness takes it upon themselves to do something with the idea. Most people do not have the time, money, or ingenuity to steal your idea and turn it into something useful.
While paranoia probably will not help you succeed with your business, there are some things you can do:
1. Talk to people you trust;
2. Mark confidential and copyright all written materials;
3. Don’t provide your entire business plan to people, use a summary and enough information to gain interest without giving away everything;
4. Use the Trademark symbol on your logos and name;
5. Use Non-disclosure agreements (except never with investors, more on that next post).
While many ideas are likely up for a patent or are not ready to be patented when you begin trying to find money, there are ways to protect your idea to an extent. Plus, many people who are investing in ideas are there for just that, to invest, not steal!