Protecting a Business Idea: 5 Things You Need to Know

Think you've got a million-dollar invention on your hands and worried someone will steal it? How to protect your business idea.

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Bright idea: Protecting an idea should not get in the way of starting your business. It happens to almost every aspiring entrepreneur. You have a brilliant idea for a groundbreaking business, an innovative product or a better-than-the-competition service. You're daydreaming about becoming the next Bill Gates or Ron Popeil, and suddenly it hits you -- "What if I tell people about this idea and someone steals it?"

This is a problem because, eventually, you have to tell somebody about it. To get your idea off the ground, you need vendors, investors, employees and maybe a partner or at least a mentor.
So how do you market your idea to the masses without having someone rip you off? Here are five things you need to know.
1

Yes, you can get a patent.

But you probably shouldn't waste your time right now. After all, you can't patent or copyright an idea. If your idea is tangible -- say you've designed a new way to cook eggs and you have a blueprint for your egg cooker -- you can patent that design. Chris Stamos, a patent attorney and partner with the international law firm Goodwin Procter, explains it the way he would if the Wright Brothers had been his clients back in the 1890s. "Basically, you have to have invented something," he says. "It's not enough to say, for example, 'Gee, it would be great to fly and go from place to place.' An idea is an invitation to invent, but until you actually figure out if you can make a wing with an airfoil design and put it with an engine and get lift, then you shouldn't be thinking about getting a patent."
2

Patents cost money.

If you think you're at the patent stage, the U.S. Patent and Trademark Office has a great website with all of the information you need. But remember, patent fees can range from the low hundreds to low thousands of dollars. The process isn't something you go through on a whim. "Patents have filing fees and maintenance fees over the life of the patent," says John Reddish, a Drexel Hill, Pa.-based business consultant. "Patent defense is extra and can cost into the mega-bucks. Most patents generally don't generate enough profit margin to justify these fees. Moreover, once filed, any competitor knows where to begin to 'get around' the patent. In short, it better be worth it."
3

Consider a non-disclosure agreement.

If you really feel you're onto something new and want to discuss it with some people, and you want to protect your idea from being stolen, Stamos suggests having them sign a non-disclosure agreement. True, some people might bristle at the idea ("Don't you trust me?"), but Stamos says that "business folk realize there's value in that invention, and there's only value if you own and protect your idea." He says a non-disclosure agreement is a good way "to test drive the idea." Keep in mind, however, that your idea better be pretty unique or compelling. If you have someone go through the trouble of signing a non-disclosure agreement, and then you lay it on them that you have an idea for a restaurant that sounds like any other restaurant out there, you probably won't be taken too seriously thereafter.
4

Mark your territory.

"I deal with this problem on a weekly basis," says Chicago-based attorney Steven J. Thayer. "The dilemma is that the entrepreneur is excited about his new idea and wants to tell everybody about it, but at the same time, doesn't want anybody to run off with it." He suggests putting a "CONFIDENTIAL" stamp on anything you have down on paper related to your idea, "so you can claim ownership to your work. You can also add copyright symbols, like '© 2010 Steven J. Thayer' and trademark claims, 'TM,' to logos, which help establish that you are claiming copyright and trademark protection to your works. This may legally prevent someone from making a physical copy of a business plan or summary of your idea."

This said, just so there's no confusion, copyrighting does not, according to the U.S. Copyright Office, actually protect your idea. The website's FAQ page says, "Ideas and discoveries and not protected by the copyright law, although the way in which they are expressed may be." (Yes, it's very confusing.)

In any case, putting copyright symbols by your business plan or logo is a good idea even if you aren't sure you'll ever go through the trouble of copyrighting or trademarking your idea. It's like when homeowners put a sticker on their window saying they have a security system even when they don't. A burglar knows it might just be a sticker with no actual alarm system rigged to the house, but they probably won't want to take the chance. Same goes for unethical businesspeople thinking about taking your idea. If they see that copyright symbol next to your work, they know you may not have actually gone to the trouble of registering at the U.S. Copyright Office, but probably won't take the chance of trying to rip you off.
5

Stop worrying.

Scott Fox, an online business coach and founder of ClickMillionaires.com, says ideas alone are not worth that much -- it's how they are implemented. "Get over yourself and get on with the business," he says. "What makes the difference for successful businesses is not the idea alone. Today, the Internet's free worldwide communication means that ideas are instantly accessible and potentially infinitely copyable, too. It's the implementation of the idea, a commitment to delivering the products, services or information on a daily basis, that makes the difference. You can spend your time and money investing in legal insurance like patents, trademarks and copyrights -- or you can get out there and build an audience of paying customers. The latter will make you far more money than the former."

Another way to look at it: Most professionals are indeed professionals, not crooks. It takes a lot of energy to run a business, and there's no guarantee that any business will be successful. If you have an idea for a product, service or business, odds are, you also have the passion, energy, and smarts to figure out how to make it profitable. For most time-starved, overworked people, ethics notwithstanding, the idea of stealing your idea will sound like way too much work.

Geoff Williams is a time-starved, overworked freelance journalist. He is a regular presence at AOL Small Business and is the co-author of the book Living Well with Bad Credit.

Tags: 5 Things You Need to Know, copyright, how to apply for a patent, how to file a patent, how to get a patent, patenting an idea, patents, protecting a business idea, protecting an idea, starting a business, trademarks, U.S. Patent and Trademark Office, unique business ideas

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