Obsessed with protecting your business ideas?

Can you think of something unique you could turn into money? It could be a unique style or form. It could be a different way of producing something or providing a service. Perhaps it’s in the form of a recipe or a formula. If you are lucky enough to have already developed your unique magic potion, then you might be worried that if someone learns about your great ideas they will steal them. This is why it is important for you to know how to protect your “Intellectual Property”. Here you can gain insights.

Will someone steal my idea?

Many entrepreneur-inventors worry that if they talk about their innovation with an investor, the investor may steal it. This does happen, but it is rare. Most investors are in the business of backing entrepreneurs – not being entrepreneurs. Many entrepreneurs can’t get started for fear of losing their idea.

When your product is out in the market, then others might copy it, especially if you’re onto something hot. Chances are that, even before your product hits the market, there are a dozen entrepreneurs just like you beavering away in their basements and garages working on the same thing. Don’t worry about it. Just anticipate it.

The Non-Disclosure Agreement

When you are still at the idea stage you could try to use an NDA – that’s short for “Non-Disclosure Agreement.” This is an agreement between you and the person(s) that you tell your idea to, that they will keep it all confidential.

Be warned, though, institutional investors like Venture Capital companies and active angel investors generally won’t sign an NDA. This is because they see so many deals and they are concerned that if they see your deal and then someone else’s that may be similar to yours, and then invest in it, you may take action against them for stealing your idea.

The Patent

Patents are expensive. It costs an average of $10,000 to get a patent in a particular country. Even if you have a patent in the USA, someone in China or India can copy it. They can’t sell it in the USA, but they can do what they want with it in China. That means you have to patent your idea in those countries where you want protection. Because patents are subject to interpretation, a Chinese patent may be useless. Even if it isn’t, can you afford to sue someone in a foreign country? Having a patent doesn’t mean that you are automatically protected. It only means that you have a “right” should you choose to defend that right.

Investors generally like patents. It tells them that you have something unique because in order to get a patent, a patent officer must ensure that you have an original idea. This also serves as a barrier to entry to potential competitors. But keep in mind, even if you decide that a patent is too expensive for you to obtain, you must understand that someone else can block you by getting a patent on your invention.

The Patent as Defensive Measure

Getting a patent means that you must disclose your invention to the world. This means that countries in which you don’t have a patent are open territory for copy cats. Even in those countries where you do have a patent, copy cats can make “sort-of” copies and legally work around patent claims that you have made.

You might decide not to bother with patents because they are expensive – but beware: someone else can take your idea and beat you to the patent office. They can then create a barrier for you. Therefore, you might decide to patent as a defensive measure against patent trolls.

On the flip side of this, investors are known to ask if you have “freedom to operate” meaning are you sure that you are not potentially infringing on someone else’s patent? Don’t bury your head in the sand – do extensive patent searches to see if anyone has patented your idea.

Keeping it secret

If Coca-Cola had a patent, you can be sure that there would be many copy cats making minor modifications to the recipe so as to avoid circumvention. What did Coca-Cola do? They kept it a secret!

Keeping your formula or recipe secret is one way of protecting your intellectual property especially if you have a “secret sauce” like Coca-Cola.

There are other ways to protect your ideas. If you want to learn more about the strategy regarding your “Intellectual Property”, take a look at the free eBook “Making the Business Case” written by Michael C. Volker.