Steps to guard against business ideas theft

Imitation can be costly to the innovator. PHOTO | FOTOSEARCH

What you need to know:

  • Imitation can be costly to the innovator.

Imitation of ideas is a challenge that every entrepreneur faces. There is a high probability of imitation or copying of an innovative business idea once the same has been proven to be profitable and successful. This leads to dilution of market share on the part of the innovator and eases the entry of new persons in the same industry.

Imitation or copying of business ideas is not necessarily illegal. In fact if it is considered carefully, it may help in stimulating competition in a sector and help minimise monopolistic advantages on the part of one party. This in turn leads to a situation where businesses have to continuously innovate so as to beat competition. The consumers and the market end up being the prime beneficiaries of such continuous innovation as there is an overall improvement in quality.

It has been argued before that no one person or business is a monopoly of information. The school of thought is that all ideas did in fact originate from someplace else and what is known as innovation could simply be an improvement of what is already in existence.

While strong arguments may be made for the need to create a competitive environment, there is a counter argument that there is need to reward novelty to originators of ideas by granting some sort of protection for innovating. While this makes sense, the truth is that not all original business ideas qualify for intellectual property rights award. It is interesting that business ideas on their own do not qualify for protection.

I have set out a few simple steps through which an originator of “business ideas” can guard their idea without necessarily being given intellectual property rights protection.

The first is simply being wise and cautious about your dealings with third parties concerning these ideas. Do not disclose this idea to others without being strategic about it. Premature disclosure could lead to its annihilation or theft.

In the event you opt to disclose, then ensure that you have signed non-disclosure and confidentiality agreements. Please do consult a lawyer to assist in its preparation and avoid picking template drafts from the internet. Some are irrelevant to the domestic situation and actually accord you no protection.

Another way of guarding your business idea is simply using sound organisational structure. It so happens that the persons who steal your ideas and open up parallel businesses are your employees. Therefore have a structure in place whereby disclosures are for senior management, and use trade secrets such as coding to protect the idea. The employment contract should have restriction covenants.

I would encourage one to write down the business idea in form of a booklet and seek copyright protection for the same. This means that the content of your idea will have some element of protection. In the event it is a website, it would also be useful to get copyright protection. This would minimise the imitation of the idea in so far as expression of the same is concerned.

Lastly seek trademark protection to protect your brand name from persons who would want to pass of the brand as their own.

However, the best way to guard against imitation of ideas is by engaging in continuous innovation and staying ahead of the pack.

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