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How to legally protect a business idea

6 June 2019

It’s not uncommon to find, in business sections of newspapers and websites, stories about lawsuits between businesses for intellectual property infringement. The results of such legal action often comes down to who has best protected their idea, trademark, patent or copyright.

In business today it is often the case that the most valuable aspect is the intellectual property. Often considered intangible, intellectual property is the result of ideas, of creativity and of knowledge. It is the spark that lights the flames of success for the business and is often what gives the business its point of difference in a crowded market. As a result, it is also prized and envied by that business’s competitors.

The ability to properly protect intellectual property, or the ideas within a business, has been identified as a key ingredient in the economic growth of a nation. On the Australian Government’s IP Australia website, geneticist Craig Venter, one of the scientists who first sequenced the human genome, is quoted as saying, “…intellectual property is a key aspect for economic development”.

Clearly, it is important for any business owner to ensure their ideas are completely covered. What, then, are the steps that should be taken by those starting and managing a business?

Here are the essentials.

Conduct an intellectual property audit

Begin by creating a list of your various types of intellectual property, including anything that makes your business different from its competitors.

This includes its name, logos, unique processes, innovative products, service offerings and trade secrets. It might also include designs, shapes and colours of products.

For help and inspiration during this essential part of the process, visit IP Australia’s Types Of IP web page, to ensure you’re capturing everything.

As the business grows, or as the new innovation in the already-established business is implemented, put as much down on paper as possible. In other words, create a paper trail. This includes minutes from meetings, summaries of discussions, diary notes, research notes, design notes, photographs of prototypes (or the prototypes themselves), emails to and from suppliers, and more.

Use this part of the process to become as familiar as you can with intellectual property law.

Beware of early publicity

During the startup stage particularly, businesses are often excited about the idea of publicity. After all, if media is keen to write or broadcast about the work you’re doing, it’s likely an indicator that the market will be interested too.

However, early publicity can be a double-edged sword. Others operating within the market can use the information from media coverage to create their own form of your offering. Alternatively, they might begin to crowd out that segment of the market with their own product or begin a price war, in order to make your entry into the market more difficult.

Competitors may even be bold enough to take your idea and run with it themselves. Startups are often managed on a shoestring. As a result, they may not yet have completed all of the sometimes-costly protection processes, and could not likely afford a legal battle.


confidentiality agreements are essential

Confidentiality and employment agreements

Carry non-disclosure agreements into as many conversations as possible when the business’s plans are being discussed. Some, such as investors and potential clients, might refuse to sign. But it is important to signal that you are doing all you can to protect your idea.

The same goes for employees and third parties utilised by your business. Confidentiality messages in contracts must make it clear where the line is drawn in terms of sharing information outside the business, and non-compete clauses may be added to prevent an employee or third party becoming a future competitor.

Patent, trademarks, designs and copyright

It’s not difficult to learn the differences between patents, trademarks, designs and copyright – for a very useful resource, head to the IP Australia website.

A patent gives the owner the exclusive license to make, use and/or sell an invention for a specific time period – up to 20 years. In Australia, there are Standard patents, which offer long-term protection over an invention, and Innovation patents, which protect an invention that will likely have a shorter market life. Innovation patents last up to eight years.

Whichever patent you decide upon, begin with a Provisional Application, which establishes in an inexpensive manner a filing date while you research the necessity of a full application. A Provisional Application lasts for 12 months.

A trademark might be a logo, a jingle, or the way a name is printed (in a particular font and colour, etc). It might even be a smell, a shape, a movement, or the way a product is packaged. As with a patent, a trademark protects your exclusive right to use, sell and license that trademark.

It’s important to understand that a business name is not a trademark. A business name should instead be registered with ASIC. While you’re at it, consider buying web URLs for your business name, too.

A design is a shape or pattern or other physical design feature(s) that make a product unique.

Finally, copyright is an exclusive legal right given to the creator of an original work, such as a piece of writing, imagery, music or film, that allows them to control, license or sell the work for a specific period. Copyright protects the way the idea is expressed, not the idea itself. In other words, a copyright over the painting ‘Mona Lisa’ protects that specific painting, not the idea of a painting of a woman.

In business, all new ideas and inventions should be carefully protected wherever possible, particularly if you’re confident that the idea is going to create success.

Of course, you shouldn’t live in paranoia and refuse to ever speak with anybody about your idea during its early stages. It’s important to bounce ideas off people, to speak with investors and to network within industries to find new clients. Just begin by protecting your intellectual property to ensure you’ve got a strong case, should you need it.

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