Intellectual Property Protection

If you are developing a new product or service, you’ve probably wondered a bit about this topic (and if not, you should have). How do you protect your ideas, especially from the people who work with or for you?

Intellectual PropertyBefore I go any further, I must point out that I am not a lawyer, and can only comment based on my experiences and information collected over the last few years. This is not to be construed as legal advice.

When you start working on a new idea, there are two reasons you want to protect your idea:

  1. Maybe someone has thought of this idea before, and you might be infringing on their rights.
  2. Maybe you’re the first to think of this idea, and therefore you want to protect your own rights.

In regard to the first concern, a few hours searching online can usually turn up any potential competitors. This research therefore serves multiple purposes – besides for telling you whether or not someone will sue you if you try implementing you idea, it also tells you something about your competition and the market.

In regard to the second concern, there are again two reasons to patent your idea:

  1. You want to make sure that if your idea is unique, no one can copy you.
  2. You want to make sure that your employees don’t go off and create an identical product on their own.
  3. If you seek investments, potential investors want to hear that you’ve protected your rights.

In the software industry, however, a patent and copyright provide very limited real protection. While it would protect you from someone creating an exact duplicate of your product, it would not protect you from someone creating a similar product. Likewise, since much of the new software is about re-0rganizing existing technology, there is little that is left to protect, since the existing technologies do not belong to you.

The second item in the list, however, is actually fairly easy to deal with. An IP Waiver is a document which you can have your employees sign, which basically restricts them from using the idea for their own benefit. It can also be attached to a Non-Disclosure Agreement, also known as an NDA. Such a document prevents anyone from sharing information acquired from you that is not available elsewhere.

None of these documents is fool-proof, but they are necessary. You can get the pair of documents (the IP Waiver and NDA) drafted up for your company for under $500. If you get big enough, however, to be capable of suing someone for violating one of those documents, you are not likely to have the time to actually sue them. If you don’t have those documents, however, then talking to an investor will quickly teach you why they’re required – because if one of your employees leaves, what’s stopping them from starting a competing company with what they learned at your expense?