During my career as an intellectual property attorney, I have had countless new client meetings begin with, “I have this idea…” Every entrepreneur’s first concern is to protect their ideas from others taking them and enjoying the fruits of their mental labors. And now for the bad news – there is not a single intellectual property law in the U.S. that protects ideas. So, is it time to toss in the towel on creative thinking? Hardly.
While U.S. laws tend to favor competition, they also aim to reward creativity. So, you may not be able to own your idea, but there is plenty you can do to keep imitators at bay.
Have Your Contracts in Place. When trying to protect an idea, everyone automatically jumps to copyright and patent laws. Yes, those are important, but the closest you can actually come to protecting an idea is through contracts. Employees, third-party manufacturers and suppliers, as well as anyone you pitch your idea to, should sign a confidentiality and non-disclosure agreement. During the time that your ideas remain non-public, those agreements will protect you from these third parties taking them and making them their own.
In an ideal world, you would also have non-competition agreements in place. Non-competition agreements do not depend upon the secrecy of your ideas for enforcement. Courts do tend to disfavor these agreements, however, as they do not like depriving people of a living, so you will need to have them carefully crafted as to time and scope.
Copyright. Copyright may not protect ideas, but it does protect the tangible expression of ideas. While you cannot protect the idea of a new operating system, you can protect the specific code you draft to make that operating system function. Copyright protects “original works of authorship.” These rights arise as soon as you have expressed something in a tangible medium. In other words, there is not a need to register your copyright and you can use the © symbol immediately. That said, registration of your important copyrighted works is always advisable and necessary if you want to sue someone for infringement.
Copyright grants the owner the exclusive right to prevent others from copying, distributing, performing, displaying or creating derivative works of the copyrighted material. Copyright ownership vests in the author of the work. For this reason, you must always have “work for hire” agreements in place with third party contractors as well as any employees creating materials outside of the normal scope of their employment. If you do not, they will own their work product, even though you have paid them to create it.
So, if your idea involves selling T-shirts with a unique butterfly design on the front, you can certainly protect that design through copyright law. However, that will only prevent your competitors from copying that unique butterfly design, it will not let you corner the market on selling shirts with butterfly designs.
Patent. Patents also do not protect ideas, but can protect the specific embodiment of an idea. If you’ve invented a new type of nutcracker, which functions mechanically different from any other nutcracker, you can certainly get a patent on that new device. Patents grant the right to exclude others from making, using or selling the invention covered by the patent. If your nutcracker has a unique, non-functional shape or appearance, you may also be able to get a design patent on it. Unlike copyrights, you must obtain a patent registration to secure your rights. Indeed, the failure to file an application within one year of your first offering the invention for sale, or otherwise disclosing the invention to others, will result in a loss of all rights.
Unfortunately, there are many ways to crack a nut. If a competitor designs a nutcracker that works mechanically different from your own, or has a different appearance in the case of a design patent, they will be free to compete. While a patent can protect the specific chemical makeup of a drug, it cannot protect the idea of “a drug to relieve heartburn.”
Trademarks. A trademark is any word, name, symbol or device that it used to indicate the source of the goods. Trademark rights arise out of using the trademark. As such, as with copyrights, there is no legal requirement to register the trademark. Registration, however, is always advisable as it affords many legal presumptions with respect to your rights to use the mark exclusively throughout the U.S.
Trademarks include trade dress, which is the overall look and feel of your product or its packaging. You can protect unique, non-functional packaging designs or even restaurant layouts through trademark law. A single color, such as pink on insulation, can function as a trademark.
While trademarks do not protect ideas, they certainly can assist with keeping competition at bay when you have a successful product. Even if someone reverse engineered the Coca-Cola formula, they still could not call their product “Coca-Cola” without facing an infringement lawsuit. That millions of people every day will reach for Coca-Cola without ever giving the competition a second thought, or even caring what those other colas taste like, demonstrates the power of trademarks in helping to protect ideas.
Trade Secrets. Trade secrets bring us full circle in our efforts to protect your idea. Colonel Sanders, Coca-Cola and others have protected very important embodiments of their ideas, namely, their formulas, through trade secret law. To receive trade secret protection, you must take active steps to prevent the public disclosure of your secrets. Such steps might include marking all documents containing the trade secret as “confidential,” keeping those documents in a secure place and having employees and third parties who you must disclose the secret to sign confidentiality and non-disclosure agreements.
While no one can protect an idea, anyone with a great idea can take several steps to carve out their territory. Once embodied in a tangible medium or in an invention, copyright and patent laws jump in to prohibit copying and selling knock-offs. Since success will always breed imitation, be sure to focus on your branding and trademarks. Consumers always prefer the “original,” not the cheap imitation. Finally, have your contracts in place as that is the closest you can come to protecting your ideas.