There are many ways to protect your business idea, but it’s typically done through patents. However, there are other ways to protect your business idea using copyright, creating an unfair advantage, epic execution, non-disclosure agreements, and more.
Whether you have lots of money, or none, there is a way for you to have some piece of mind in the business idea phase.
Table of Contents
Using patents to protect your idea is a great approach in some instances, but it is also costly. Even if you have not started a company but want to protect your business idea, applying for a patent can still be done if it falls under a category related to a process, product, or machine. I’ll also explain when they won’t be useful to use as many new and aspiring entrepreneurs think in the beginning.
If you have a business idea that involves and products, designed or engineered goods, or algorithms, it is good to check the patent database. There are a few different databases you can check out.
Someone may have a patent for a similar idea you have thought of and this gives you two options:
- You can try to buy the patent from them if it looks like a person is registered to it and not a corporation. This gives you the ability to run with a design that has already gone through the whole patent process, saving a lot of time and money.
- Try and design something that deviates enough from this patent that it is legal to produce. If you want to patent it at this point you will have to go through the process of applying for the patent and consulting with lawyers which can be expensive.
You may even find the exercise of searching patent databases creates new ideas for you.
There are a few different types of patents that you should be aware of in case you want to take this route to protect your business idea.
A utility patent is a patent that covers inventions and creations for products, processes and machinery. After you’ve gone through the application process and they have accepted your patent, it will stop others from being able to copy you without authorization. A lawyer is usually needed in most cases before filing with the patent office in your area.
For example, Rolex may have utility patents since their watches are composed of moving parts, and put together in a specific process that makes a difference in the quality.
A design patent is a patent that covers how something is designed, quite self-explanatory. Things like jewelry, mechanical parts, and furniture are things that have design patents. For example, IKEA would have patents on the designs of their furniture, and most likely each piece as well. Again, like the utility patent, a lawyer is usually needed before filing with the patent office.
Copyright is the exclusive rights for your original compilations of facts (i.e., a city guide), literary work (i.e., sales emails, long-form sales pages) and other related works. The duration of the copyright can vary, but it is generally held for as long as the person is living to even 100 years after they die, depending on the laws in your country and area. One large limitation to copyrights is that they only protect the original expression of idea. Ideas or procedures are not protected under copyright, and would fall under patent law for protection.
Example of a books copyright elements
Copyright © 2010 by Wily E. Coyote
All rights reserved. This book or any portion thereof
may not be reproduced or used in any manner whatsoever
without the express written permission of the publisher
except for the use of brief quotations in a book review.
Printed in the United States of America
First Printing, 2010
Falling Anvil Publishing
123 Mesa Street
Scottsdale, AZ 00000
Creating an Unfair Advantage
Creating an unfair advantage is one of the best ways to protect your business idea. It will also protect you when it launches into an operating company too.
An unfair advantage is what differentiates you from your competitors, but also allows you to be better in a certain aspect. This advantage also needs to be sustained. To create that unfair advantage for your business you’ll need to start in the idea phase by doing extensive customer and competitor research to see where you can differentiate yourself. From this research you will find out what the customers don’t like and how you could potentially fix those problems. You’ll also discover how each competitor is different from each other. Once you know this you can map it out on a grid, and pinpoint yourself so it’s easier to see how you are different.
Another way to create an unfair advantage is to use new and innovative technologies and techniques. For instance, if someone develops a revolutionizing piece of technology that can cut a business’s costs by 40%, using this technology could create an unfair advantage for your idea. However, you would want to set it up where you get exclusive rights to the technology you are going to use so the unfair advantage can at least be sustained for some period of time.
If you are curious about this route, you can keep up with the latest scientific and technological breakthroughs at the below sites:
The greatest and way to create an unfair advantage is to create a blue ocean. This phrase means you are creating a market to enter with your business idea. For example, Sony was able to create a blue ocean with their Walkman cd and cassette players. Never before were people able to have personalized music walking down the road, without disturbing others. This allowed Sony to gain significant market share over competitors and became a booming business because of it. Others were quick to follow, however, Sony had a strong unfair advantage in the beginning. If you want to learn more about creating blue oceans, you can check out the full book and details.
Sharing your idea…. Carefully
I am a strong believer that everyone should share their business ideas freely, most of the time. There are two scenarios where I think aspiring entrepreneurs should be sharing their idea, and when they should be keeping it secret.
The first scenario is if you just came up with the idea, and you don’t even know if there is a market or if people are willing to buy the product or service. In this stage, you should be sharing your idea freely. Anyone you run into, run the idea by them to see what they think. This will help you get feedback from potential customers, and it will also allow you to work on your pitch. In this scenario you’ll need to be comfortable sharing your idea with everyone because you will need to find out if people like the idea and if it solves a problem they have in their life.
The second scenario is if the business idea has already been validated and you know there is a profitable market you could thrive in. At this point, to validate the idea, you would have already talked to potential customers in your target market.
Since it is now validated, you don’t need to further tell people if you don’t have to. In some instances, it is best to just put your nose to the grindstone in this scenario, and execute the idea. For instance, you may be raising money for the idea, and don’t want others to see and enter the market as well. But, in other instances, once it is validated and you launch it, you shouldn’t be afraid of telling everyone.
Epic Execution + Investment
This way of protecting your business idea is not usually discussed. When it comes to business ideas, others could have the same idea as you. The probability of that is high. However, if you happen to execute on the idea quicker and better, than you could be the winner in the end. That is why epic execution combined with some investment to speed up growth can be a way of protecting your business idea. Many people don’t even make it to this stage as it takes a lot of time and resources. So, if you just launch it, others can still copy you but you will be ahead of the game.
Subscribe and get instant access to exclusive business idea guides, strategies, and tips.
If you are scared a potential employee or co-founder will leave you and start the same idea, get them to sign non-compete agreements (NCA). You can find many templates for NCA’s (this is designed for the USA, and you should find a template for your specific country to stay within regulations), and the usual terms range from 12 months to 5 years related to how long they cannot enter the same business. This will protect you from people joining your company, stealing your idea and processes, and leaving to become a competitor. However, this won’t protect the idea if you don’t turn the idea into an operational company.
Using non-disclosure agreements (NDA) can be a great way to protect an idea if you are sharing it with potential investors or others like app developers. Warning, many investors may not meet with you if you ask them to sign an NDA.
An NDA makes it illegal for the person who signed it to share any specific information you share with them pertaining to the details of the contract. For instance, if you have a wicked business idea and need investment to execute but are scared to share the idea with a certain group, you can get them to sign an NDA. Then, they are legally liable for the consequences if they share the idea. If you’re curious, here is an example of an NDA for the US. If you live somewhere else, be sure to check online for templates related to your country, as rules and regulations around these can change.
One of the best ways to protect your business idea with little money is to document everything. Write everything down that you do. From the idea and business model, to the name and any patentable assets. Then, mail it to your house via registered mail and keep that copy unopened and stored. The registered mail will be time-stamped and legitimate if you need to fight something in court that those certain assets belong to you. It is not guaranteed protection like a patent, but it can hold some legal weight in certain situations and is better than nothing.
For example, say you choose a business name for your idea called “Corporate Security”. If someone else chooses that name while doing the same type of business, you could legally claim the copyright if someone else tried to buy it since it was all documented properly. This is not fool-proof though.
There you have 7 ways you can protect your business idea. If you are worried about someone stealing your idea or intellectual property, you now have some ways to protect yourself. Even if you use one of these, it can give you a bit more piece of mind as a new or aspiring entrepreneur. If you want to learn more business idea strategies, be sure to subscribe below, and I’ll email you two ebooks, free, to get you started.