Bodacious Secret No. 1: Protect Ideas

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It may come as a surprise to many, but most ideas, concepts, and formats are not per se protectable as forms of intellectual property, which means these forms are free for the taking unless an entrepreneur takes additional steps. The steps an entrepreneur can take to protect ideas, concepts, and formats involve utilizing confidentiality and non-disclosure agreements, and/or protecting the expression of the idea through the copyright, trademark, and patent process.

In disruptive businesses, ideas are the life-blood. But when businesses share ideas, with no real thought to protecting the expression of the idea, a business is essentially giving a gift to others of a nice headstart to competing against it.

In my career, I've seen entrepreneurs commonly give away ideas in four ways through 1) unsolicited submissions; 2) the RFP process, 3) lack of IP-related agreements, and 4) confusion between protecting business methods and business models.

Unsolicited submissions

An unsolicited submission is what happens when a submitting business sends a product or information to another business for evaluation, sale, or licensing without the target business's request or approval.  Usually, this means there is no non-disclosure agreement in place, and consequently, no duty of the target business to keep the submission confidential.

For an unsolicited submission strategy to work to the benefit of the submitter, at a minimum, the submitting business should only share information that is publically available and non-critical, or is the subject of a pending patent, trademark or copyright application.  Issued IP registration rights are best, but pending IP rights are the next best thing. Furthermore, work to negotiate and fully execute a non-disclosure agreement before sharing. Many businesses may not agree to an NDA early in the disclosure process, but it's worth a try.

Requests for Proposal (RFP)

Submissions of ideas, concepts, and formats can also put a submitting business at risk if the submission is the result of an RFP (Request For Proposal).  A submission in response to an RFP can put a business at risk because a business may have no real idea who is reviewing the confidential ideas and information submitted.  Most responses to an RFP will be shared with an internal review committee at the receiving company, and what a business doesn't know as the submitter is whether the review committee participants are competitors, whether the reviewers will share the information with a favored company to garner a lower bid, or if the receiving company will be careless with the provided information and cause the information to go public. The best protection is sharing only public, non-critical information or information that is the subject of active trade secret measures, or pending patent, trademark or copyright applications.

Employment/Consulting Agreements

I can't tell you how many times I've heard entrepreneurs grumble about agreements with employees, partners, and suppliers.  Particular complaints zero in on the length and breadth of the agreements I draft for them. My response is always that agreements are designed to be used in the worst of times, and not the best.  When things are going great, you don't really feel the need to refer to an agreement as a reminder of what a party agreed to do or not do.  But when teams break-up, employees quit or are fired, and suppliers start to work with a business's competitor, that's when everyone wants to know what the agreement says. 

Do yourself a favor, and address IP related issues through agreements upfront and in writing. Don't give disgruntled employees, suppliers, and former business partners a free ride by allowing the continued use of your company ideas.   

Business Methods vs. Business Models

Business models and business methods are two different things.  The two may sound the same, but in the eyes of the law, they are very different.  A business model is how a company plans to make money; a business method is a process or set of activities expressed for doing so.  Business methods may be protected by trade secret protections and patents. Tangible expressions of a business method may take the form of branding that trademarks can protect, or even original works of authorship that are fixed in a tangible form that copyrights can protect.

In a business method vs business model showdown, LeBron James is making news because of his web series called "The Shop." In the series, James and his guests sit around a barbershop and talk sports. In a similar format called "Shop Talk" University of Alabama's Nick Saban and his guests sit around a barbershop and talk sports. James's legal team sent the University of Alabama a letter warning that Crimson's use of the barbershop format for talking sports impedes on the 'ideas, concepts, format, and other intellectual property rights' of "The Shop."

 

 Unfortunately, unless LeBron James has registered IP to the tangible expression of the ideas in “The Shop,” his hopes of protecting his business model are probably down the drain.

 

About this Series

Bodacious is a legal information series related to intellectual property and technology law issues, such as patents, trademarks, copyrights, privacy, business formation, and litigation law issues. The information in this post focuses on the 9 Legal Secrets Every Entrepreneur Should Know To Have A More Bodacious Business.

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Contact Precipice IP, PLLC for more information about ways to manage your company’s intellectual property.

About the Author

Angela Grayson is the Principal and Founder of Precipice IP, PLLC.  She practices before the U.S. Patent and Trademark Office and is a registered patent attorney. Ms. Grayson is licensed to practice before the Mississippi Supreme Court and is admitted to the Court of Appeals for the Federal Circuit and the U.S. Supreme Court Bar. Contact Angela Grayson @ 479.259.2966 or 601.427.4773.