Financial Poise
lightbulb symbolizing protecting intellectual property

Critical Tactics for Safeguarding Your Ideas and Intellectual Property Rights

Take Steps to Avoid Intellectual Property Theft

Creating an ingenious idea that could turn you and your business partners into millionaires is one thing. Protecting that idea and making sure no one steals it is another.

Your intangible assets, which include your brand and intellectual property (IP), are valuable assets that position you in your market and give you a competitive advantage. Whenever you market your ideas to venture capitalists or angel investors, you share bits and pieces of your ideas with others. While the vast majority of people aren’t out to steal your idea, it’s still a possibility that you have to keep in mind.

Follow these strategies on how to protect intellectual property from thieves. It could save you millions of dollars down the line.

Apply for Official Intellectual Property Rights

Whether you’re designing a shoe (like Nike, who filed a patent suit against Skechers for copying its designs) or your startup bank has designed a distinct logo (like Current, the company that sued Facebook for infringement over their Calibra cryptocurrency logo), your brand should have legal protections put in place for its intellectual property rights.

There are four types of intellectual property:

  • Copyrights: for creative works
  • Trademarks: for logos, images, and identifiable goods
  • Patents: for the invention of a product or process
  • Trade secrets: include formulas, processes, practices, or designs that give a company a competitive edge.

The United States Patent and Trademark Office (USPTO) defines all intellectual property types as “creations of the mind … that can be embodied in a form that can be shared or can enable others to recreate, emulate, or manufacture them.” It’s the shareable and copiable part that makes it so important to protect those creations.

To Patent or Not to Patent?

Have an invention that you don’t want others to copy? Apply for a patent, or better yet, fill out a provisional patent application (PPA). The earlier you file a patent, the better.

The PPA is the quickest, easiest, and cheapest way to market the invention without fear of losing patent rights, and you can modify your PPA every time you need to refine your invention or idea. Plus, once you file your PPA, your idea will be labeled “patent pending” or “patent applied for.” Both of these labels are valuable deterrents to infringement. A patent protects against independent discovery, so you’re protected even if the infringement isn’t intentional or malicious.

But wait! Patents can also lead to what they are meant to protect against. Therefore, a patent may not always be the best option. A patent is published publicly, which means that important information about your invention is out there for companies to cleverly replicate with methods that may not violate the patent. Sometimes, it may be better to keep your invention a complete secret. However, you still run the risk of losing legal protection.

Apply for a Trademark

Once you’ve created a business name and logo, apply for a trademark. Create a memorable trademark to stand out from other businesses when you market your company in the future. Also, use copyright symbols—the word “copyright” or a “c” in a circle—when documenting and developing your product. After applying for a trademark, purchase a patent to fully protect all product ideas and designs.

To police your trademark, you may consider using a tool as simple and cost-effective as Google Alerts, or you may consider using a trademark search firm that can regularly search domestic and international registrations.

Legal Protections for Trade Secrets

A trade secret, unlike a patented property, cannot be protected if it is independently discovered or if a holder fails to maintain secrecy. However, trade secret suits can filed in the case of misappropriation. This is when a trade secret holder intentionally sells or reveals a trade secret without consent, or someone acquires the secret through improper means.

The Defend Trade Secrets Act of 2016, which requires the United States to protect trade secrets, has given companies the option to file federal lawsuits in trade secret cases. This is beneficial due to the fact that many states have their own definitions for trade secrets.

Regarding international business, it’s important to remember that intellectual property, even if protected by a patent or trademark, is not legally protected abroad. Your patent is only good in the United States. You may file an international patent application or contact the U.S. Department of Commerce to learn more about your options.

How to Protect Intellectual Property in Transactions & Other Best Practices

Copyrights, patents, and trademarks are just a piece of the IP puzzle. Your company should implement best practices that further protect intellectual property. Consider the following approaches.

Avoid Discussing Your Idea

This might seem like common sense, but if you’re excited about your idea, it’s hard not to tell anyone about it. Ensure you tell your idea to only your trusted confidants and avoid sharing your idea on a public forum. If you pitch your idea to a potential client, giving only the details necessary to convey your company’s idea in broad strokes is best.

Use Non-Disclosure Agreements (NDAs)

Non-disclosure agreements can help protect your idea before revealing it to your friends or associates. Remember that investors may reject signing an NDA before you speak with them. Potential clients may do the same. That’s why you should attach a confidentiality agreement to your business plan, so potential investors or clients who read it won’t be able to use it to start their own business.

Make Protections Clear to Employees

In addition to investors and buyers, intellectual property theft can stem from your own employees and contractors. Make sure your employees also sign NDAs clarifying that all products and materials they create while working for the company are owned by the company. Some larger companies will even separate departments or teams to keep them from exchanging information about the product or having a full picture of the product. Duties are compartmentalized, and individual teams cannot reproduce the product.

Document Everything

Documenting everything will help you create a paper trail that you can use to show that the idea was yours from the beginning. If an investor happens to take your idea and attempts to turn it into a business model, take that investor to court and use your business documents to show that he or she stole your idea. Just remember, all documents containing intellectual property should be kept in a secure location that requires strong credentials and authentication, such as two-factor authentication.

Make Sure Your Creation Is Specific and Detailed

Before you consider protecting your intellectual property, make sure that it is protectable in the first place. If a term is too vague, it may be rejected for a trademark. If your invention is not unique enough, it may be denied for a patent.

Be Proactive And Protect Your IP

Consider consulting with an intellectual property lawyer to ensure applications are filled out correctly and your paperwork will hold up in court. If finances are a barrier to finding legal representation, the Patent Pro Bono Program and Law School Clinic Certification Program recommended on the USPTO website are good places to start.

Your intellectual property rights should be considered a major asset of your company right from the start. Always be aware of how much information you impart and who has access to that information.

We think you’ll also like:

  1. Mickey Mouse, the Founding Fathers and Copyright Law
  2. Businesses Face Growing Need for Cybersecurity to Protect Intellectual Property
  3. Maximizing the Value of a Company’s Intangible Assets

[Editors’ Note: To learn more about this and related topics, you may want to attend the following on-demand webinars (which you can view at your leisure, and each includes a comprehensive customer PowerPoint about the topic):

  1. Leveraging and Protecting Trade Secrets in the 21st Century
  2. Copyrights, Patents, and Trademarks…Oh My!
  3. IP-What Every Lawyer & Client Must Understand

This is an updated version of an article originally published on June 27, 2016, and revised on October 22, 2019.]

©2024. DailyDACTM, LLC d/b/a/ Financial PoiseTM. This article is subject to the disclaimers found here.

Share this page:

About Matt Niksa

Perhaps the youngest person to ever write for Financial Poise, Matt Niksa was an editorial intern with the company during the summer of 2016. Prior to that he was a contributing writer for AOL and to his time with Financial Poise, Matt was a correspondent with the Palo Alto Daily Post. Share this page:

Read Full Bio »   •   View all articles by Matt Niksa »

follow me on:

Article Comments