• Intellectual property
  • July 02, 2021

How To Protect Your Business Ideas

article

Many intangible business assets fall into one of the protectable categories of intellectual property. Distinctive branding features or inventions, for example, would be protectable as trademarks or patents respectively.
Mere ideas (at least before they have been executed) however, can be difficult to protect legally. Copyright, for example, only protects the expression of ideas (once they have been recorded or fixed somehow) and not the ideas themselves. This is known as the idea-expression dichotomy. In other words, it will only protect the output of the idea and the way that idea is expressed, not the idea itself.
 
So what if your business concept, brainwave or initiative is still just an idea? In these early stages, it’s important to be selective about who you reveal your ideas to. That’s because confidentiality is the only real way to protect an idea. English common law, automatically dictates that a person who has received information in confidence cannot take unfair advantage of it without the discloser's consent. However, it is always advisable to have a written confidentiality agreement (or non-disclosure agreement/NDA) in place to ensure the recipient is contractually obliged to keep the information confidential. Doing that avoids problems of falling back on the default position and having to prove that the information disclosed was confidential and that the recipient knew or ought to have known that.

Then there are trade secrets, which are a specific form of confidential information that is commercially valuable, treated as secret (or known to a small group of people) and gives the owner a competitive advantage. That might include new technologies, secret formulas and recipes, technical know-how, source code, algorithms, sales methods, manufacturing processes and customer lists. The list is not exhaustive - it could cover whatever is non-public and sensitive to your business, and can include a very wide scope of information assets.

Trade secrets can serve as a useful substitute or complement to patents.  Firms often choose trade secrets to maintain a competitive advantage, especially when an invention is not eligible for a patent or when the inventor does not wish to disclose the secret publicly (which a patent requires you to do). Being free, they also provide a relatively low-cost protection mechanism. 
Crucially, because trade secrets and confidential information lose their protection if they fail to remain secret, valuable or reasonably protected, there must be active steps taken to keep the information secret. The best way to do that is to store it safely (maybe that involves the use of encryption software), ensure that only those people necessary have access to it, and ask whoever you’re disclosing the information to sign an NDA before you give them access to that information.

Doing that will put them on clear notice that you consider that information to be confidential and, if it’s well drafted, it should define the specific permitted purposes for which they can use and evaluate that information.

Questions?

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In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.



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