How Do You Protect a Business Idea?

Can an idea ever be protected legally?

Have you ever dreamed up an idea for a product that you believe will revolutionize the industry within which you work? Ever wondered how you can go about protecting this idea to make sure no one steals it?

Sadly, the truth about ideas is a tough pill to swallow. In reality, ideas can’t be protected. Period.

An idea is just that — an idea. That’s it. An idea is not a product. An idea is not a business. An idea can’t be patented or trademarked or copyrighted. An idea is an intangible thing that is not given legal protection.

A patent is protection that is given to a product or invention. A copyright protects creative expressions of authorship, such as a song or a book. A trademark protects things like logos and brand names.

The difference between all of those types of intellectual property and an idea is that with the former, someone has taken an idea and given it shape and form, but the latter is nothing real or proprietary.

Why You Can’t Protect an Idea

The fact is, ideas are a dime a dozen. In reality, usually, the idea is the easy part. The challenge, and the thing that is protected, is when someone puts sweat equity into an idea, gives it form and function, and turns that idea into something tangible.

No company will pay you, or give you some sort of ongoing royalty, for your idea. Having something tangible to share is the key. Companies do buy ideas that are patented or trademarked. In these cases, you have something real and exclusive to sell.

But an idea alone is neither.

Two Compelling Reasons Why No One Really Wants to Steal an Idea

The other problem with folks who think that their brilliant idea is enough to earn them a million dollars without having to do any work is that, at least in my experience, rarely does someone actually want to steal your great idea, for two reasons:

1. They are not as enthused about it as you. Now, you may think you have come up with the greatest idea since sliced bread, and maybe you have, but without actually taking that idea and turning it into something, it’s really nothing. And getting someone excited about an intangible nothing, even if it is a clever nothing, is difficult.
2. They know it takes work. Even if your idea is as great as you think it is, other people know that taking an idea from inspiration to market typically takes many years, and a lot of money. Most people are so busy with their own things that they can’t be bothered to steal yours and hope that their toil and trouble will eventually be worth it.

Now with that general rule in place, let’s note that there are times when you may need to share an idea with someone or some entity, and you want everyone to know that you thought of it first. In that case, here’s what you can do:

Have them sign an NDA. Non-disclosure agreements are documents that state that you’re sharing proprietary, non-public information and that the other party cannot share it without your prior, written approval. It’s common to use an NDA for business plans, proposals, information, products, or ideas in development.

Other than that, remember the famous words of Thomas Edison: “Genius is one percent inspiration, ninety-nine percent perspiration.”

Disclaimer: The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.