How to Legally Protect a Business Idea

You have a great business idea and need time to bring it to fruition. In the meantime, you may wonder how to protect a business idea and ensure your future success. Unfortunately, many fail to take reasonable steps in protecting a business idea from competitors and lose their rights, even as the original creator.

How to Protect a Business Idea

There are a number of ways to legally protect your business ideas. The best option for you depends on the type of idea and what you want to do with it. Reviewing all options with a business law attorney to protect your business ideas ensures you make the right choices moving forward. 

Federal or State Registration

When you’re thinking about how to protect an idea for a business, one of the first things you are likely to consider is officially registering your idea with the appropriate federal or state office. Registration falls into three main categories: patents, copyrights, and trademarks. Each of these categories provides different types of protection and for different lengths of time.

Patents

A patent is a property right granted by the U.S. Patent and Trademark Office (USPTO). The title of patent holder entitles you to exclude others from using, making, or selling your invention for some time. The USPTO provides information on how to patent a business idea. 

There are three different types of patents: utility, design, and plant. 

Utility patents protect the way an invention functions, and design patents protect the way an invention looks. Plant patents can protect invented or discovered asexually reproduced plants. Design patents last for 15 years from the date of the grant, while utility and plant patents last for 20 years.

Consult with a qualified business law attorney to discuss how to patent a business idea. Patent registration is costly and requires considerable time. A business law attorney ensures you file for the correct patent and eliminates delays through their knowledge of the patent application process.

Copyrights

A copyright represents a collection of rights granted to an individual upon creation of an original work. A copyright provides answers to the question of how to legally protect a business idea. Copyrights include the following:

  • The right to reproduce the work,
  • The right to prepare derivative works,
  • The right to distribute copies, 
  • The right to perform the work publicly, and
  • The right to display the work publicly.

A copyright grants you, the owner, the right to assign, license, or transfer the copyright to others. Additionally, the power of copyright permits the owner to choose the way the public views your work.

Trademarks

A trademark is a word, phrase, symbol, or design that identifies and distinguishes the source of goods. A service mark is a word, phrase, symbol, or design that identifies or distinguishes a service’s source. Examples of trademarks include slogans, brand names, and brand logos. Acquiring the rights to a trademark does not require registration. The first and continuous use of a trademark in commerce establishes your rights. However, registering a trademark does provide additional protections. You may decide to register your trademark with the USPTO, your state, or both, depending on the type of protections you need. 

Non-Disclosure Agreements

A non-disclosure agreement may serve as an effective protective measure if you plan to work with others on your idea. A non-disclosure agreement, or NDA, operates as an agreement between parties not to disclose your idea or share information with third parties. A qualified business attorney may draft an NDA with no expiration date, thereby providing you even stronger protection.

Non-Compete and Non-Solicitation Agreements

A non-compete agreement operates similarly to an NDA, but it serves to prevent someone from starting a business similar to yours. A non-solicitation agreement may work in conjunction with a non-compete agreement to prevent someone from stealing your employees or clients.

Typically, non-compete agreements have to be limited in time, scope, and location. For example, if your company sells tires in a small town, it would be difficult to enforce an agreement that prevented someone from selling tires anywhere in the country for the rest of their lives. However, the agreement may prevent someone from starting a competing tire business for five years within a 30-mile radius of your business.

Work-for-Hire Agreements 

Work-for-hire agreements can allow you to get help with your idea without giving up your rights. In a work-for-hire agreement, you hire someone to work for you to analyze and improve your idea. Anything these individuals come up with to perfect your idea becomes yours. If you file a patent, someone you hire will identify as a co-inventor on your patent. Despite this title, they own no rights to the patent.

Provisional Patents 

The U.S. Patent and Trademark Offices issues provisional patents (PPA) to protect an invention. Provisional patents protect a patent during the 12 months before filing the formal application. The provisional patent allows the inventor to pitch the idea, test its commerciality, and fine-tune any prospective issues before completing the expensive patent application. The recognizable “patent pending” label affixes to patents during this provisional period.

Trade Secrets Law

Another way to protect your ideas is to keep them secret. The Uniform Trade Secrets Act (UTSA) protects trade secrets that: 

  • Have either actual or potential independent economic value because they are not generally known;
  • Have value to others who cannot legitimately obtain the information; and
  • Are subject to reasonable efforts to maintain their secrecy.

There exist two common ways of stealing trade secrets. One is through dishonest means such as stealing. Another is through a breach of confidence. For example, a former employee who had rightful access to the trade secret may use it without permission or sell it to another company. If someone steals your secret, you may have a legal claim against them if all three of the above elements are present.

The steps you take to protect your trade secret are particularly important. You can show you made reasonable efforts to maintain secrecy by doing things like:

  • Limiting the number of people who have access to the secret; 
  • Ensuring you have adequate security; and 
  • Having your employees sign non-disclosure agreements.

If your company fails to adequately secure your secret, you may have no recourse if someone misappropriates it. For example, a company with a high turnover rate where all employees have access to the trade secret will probably not be considered to have made reasonable efforts to maintain secrecy.

Use Secure Communication

When discussing your ideas, be sure to do so over secure connections. Hackers often gain access to ideas by hacking insecure communication channels. For example, when texting someone over your laptop or phone, you may want to use a secure messaging application. Encrypting your communications solidifies protections, so your ideas don’t end up in the wrong hands.

Timestamp Your Ideas 

From the initial idea to the final product, be sure to timestamp all your ideas. Timestamping may be as simple as sending an email to yourself with a short description of your idea. The email memorializes the date and time of inception for that particular idea. This type of evidence supports the argument that the idea was your own and not inspired by others. In the event the originality of your idea is challenged, timestamping may serve as effective evidence. 

Communicate Your Idea After Its Protected 

After you have effectively protected your idea, educating those around you about your idea also serves as protection. While it seems counterintuitive, marketing, education, and other channels showcasing your idea to the public help establish your legitimate use of the product or idea.

Contact Us

Creating your business idea may represent a new and exciting future for you and your business. The business attorneys at BrewerLong understand the importance of protecting your ideas. BrewerLong provides full-scope legal services to our clients of all sizes for business needs. Our dedicated attorneys provide you with knowledgeable legal counsel and explore how to protect your business ideas. We understand the elements and requirements of trademarks, copyrights, trade secrets, and patents and can help you through the process. Contact our office to review your idea with one of our skilled business law attorneys today.

Author Photo

Michael Long

As a decorated combat veteran, the Marines taught Michael the value of working with dedicated and skilled professionals. Michael advises both business owners and individuals in commercial transactions and dispute resolution. His complex litigation focus includes business break ups, professional liability, insurance coverage, tax, trust, real estate, contract, intellectual property, and loan disputes. The combination of his transactional and litigation experience allows Michael to see beyond just the immediate issues presented and develop practical cost effective solutions for his clients, to maximize benefits and minimize risks in both the short and long term.

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