The Waterfront Partnership

Protecting An Idea

I've got an idea! Lets get started!

Legally, there are three ways to protect an idea, but essentially which one you choose boils down to cost and the nature of the idea that you seek to protect.

It is worthwhile considering your options carefully at the start and getting appropriate legal advice, as this will help you to maximize the value of your business from the outset.

1.   Patents

A patent protects an idea which is new and inventive. A patent is a territorial monopoly right that allows you to stop others making, using or selling your new invention in most cases for 20 years. For this reason, potential acquirers and financial backers (including venture capital companies) look favorably on companies owning patent portfolios.

However, the downside is that patents are costly to obtain and enforce.  Accordingly, it is only worthwhile applying for patents if the new invention is both difficult for your competitors to design around and has commercial value to your business. We can assist you in this process.

If you are aware that your competitors own or are starting to apply for patents, then this is generally a good indicator that you should also be thinking about doing the same.  A patent is an asset which creates and adds value to your business and can be exploited using the conventional means through licensing, sale or by using it as security to raise finance from a lender such as a bank or venture capital company.

There are two key legal requirements to satisfy before you can obtain a patent in the UK.

• The first is that the idea must be new. This means that the idea must not have been disclosed by you or anyone else prior to making a patent application. Therefore, until an application is made, you must only provide other people with information about your invention under the protection of a Non-Disclosure Agreement (NDA).

• The second is that the idea must be inventive. Only things which involve a significant degree of originality and provide a clear advantage over that which is already known can be patented or, put another way, a skilled person well informed and experienced in the field must not view the idea as something obvious.

2.   Keep it a secret - Confidentiality

Like the Coca Cola® recipe you could just keep your idea a secret and either never disclose the magic ingredient or always use NDAs to keep things under wraps.  The problem, of course, is that confidentiality can never be guaranteed.  And whilst you have a right of action to sue someone who discloses information in breach of an NDA, this is rarely sufficient compensation when the cat is ‘let out of the bag' so-to-speak.  Further, this avenue of protection falls by the wayside when the idea is inherently disclosed through marketing, advertising and/or sale.

3.   Write it down - Copyright

The simplest means of protecting an idea is to write it down to enable copyright to protect the form in which the idea is expressed. Copyright also protects technology such as software.

The problem with copyright, however, is that it is only infringed if someone actually copies the way in which you have expressed an idea.  So someone could achieve the same result from reading your idea but not technically infringe your work because they have not copied the whole or substantially the whole of what you wrote.

To maximise your copyright protection, we recommend that:

• You use a universal copyright notice on all copyrighted material which makes it clear that you own the copyright and that restricted acts may only be done under licence from you i.e. © [year of creation] [your business name] [all rights reserved].

• You keep records of (i) all original works; (ii) the authors of original works; (iii) the date of creation of original works; (iv) the file history surrounding original works (all prototype drawings/designs etc); and (v) the dates of disclosure of original works to third parties and, if applicable, the general public.

© Waterfront Partnership 2006