Best Defense Protecting your intellectual property

By Don Debelak

Opinions expressed by Entrepreneur contributors are their own.

Business Start-Ups magazine, February 1998

Question: I have an idea with start-up costs of $150,000 to $200,000, and $3 million annual sales potential. How can I protect myself if I take the idea to a business or an individual?

Answer: There are only three ways to protect intellectual property in the United States: patents, trademarks and copyrights. A patent applies to a specific product design; a trademark to a name, phrase or symbol; and a copyright to a written document. All three methods have limitations; there's no one perfect way to protect an idea.

Companies really don't pay for an idea, patent or trademark. What they pay for is the work you've done to get an idea to market-ready status. I recommend taking your idea to a company with this proposition:

1. Tell them you've discovered a market opportunity or a new product with strong potential. Disclose only a bare outline of your idea.

2. Tell them you're willing to develop the idea at your own risk and expense until it's ready to market. (If you don't want to go that far, you can guarantee to develop the idea to an intermediate stage, such as a prototype, a market research study or a completed business plan.)

3. Ask them to agree to evaluate your idea when you've completed Step 2. If they don't want your idea at that time, they don't have to pay anything. If they do want to use your idea, they agree to pay either a prearranged lump sum or a royalty fee, or to negotiate in good faith toward an agreement.

This doesn't guarantee the company won't steal your idea, but it does give you an upfront agreement, some letters documenting your discussions, and several meetings over a period of time to support your case that the company stole your idea after agreeing to reward you for your efforts. I recommend you follow these steps even if you have a finished product or idea already in place.

I'm not suggesting you shouldn't also pursue a patent, trademark, copyright or Statement of Confidentiality and Non-Use. Obtain them if you can; use as many tactics as possible to protect yourself. But you have to accept risk as part of the inventing process.

Don Debelak, author of Bringing Your Product to Market (John Wiley & Sons, $19.95, 800-225-5945), is a marketing consultant specializing in bringing new products to market.

Want to be an Entrepreneur Leadership Network contributor? Apply now to join.

Editor's Pick

Innovation

4 Ways Market Leaders Use Innovation to Foster Business Growth

Forward-thinkers constantly strive to diversify and streamline their products and services, turning novelties into commodities desired by many.

Business News

JPMorgan Shuts Down Internal Message Board Comments After Employees React to Return-to-Office Mandate

Employees were given the option to leave comments about the RTO mandate with their first and last names on display — and they did not hold back.

Business News

Your Old Apple AirPods Can Soon Act as an Over-the-Counter Hearing Aid, According to the FDA

The new software is compatible with the Apple AirPods Pro and accessible through iOS — for free and now FDA-authorized.

Business Process

The Best Times, Days and Months To Post on YouTube (2023)

When is the best time to post YouTube videos to maximize their effect? Discover the best time to post on YouTube in this detailed guide.

Business Ideas

70 Small Business Ideas to Start in 2025

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2025.

Leadership

From Elite Athletes to Tech Titans — Discover the Surprising $100-Million Habit That Leads to Extraordinary Success

Success comes from mastering focus, eliminating distractions and prioritizing what truly matters.