As a business grows, pitching becomes very crucial to its success. Since the business will want to attract investors, new customers, and even new employees, the owner may have to reveal some critical aspects of the business to others.
However, note that by pitching the idea to potential stakeholders, you leave yourself prone to the risk of disclosing so much information that the idea might be stolen or no longer be protected by law.
At this age, a good number of entrepreneurs are shocked to realize that stealing someone else’s business idea is in many ways perfectly legal. Unless the idea is intentionally safeguarded by a trademark, patent, or copyright, other businesses can steal the idea and run with it. Owing to that, you must take into consideration how to legally protect your business idea.
Although most individuals are not out there to steal your ideas or concepts, however, there is also a good possibility that it might happen. Owing to that, businesses can leverage a couple of steps to prevent theft after they start sharing their concepts with others.
Howbeit, many fail to take reasonable steps to protect their business idea from competitors and lose their rights, even as the original creator. If you’re in the process of developing original ideas for new products or services, here are some practical steps to help you pitch your business without it being stolen.
Steps to Pitch a Business idea Without It Being Stolen
Ensure You Don’t Reveal Too Much
The first way to pitch your business idea without it being stolen is to ensure you only reveal necessary information. When you are pitching a concept to a potential investor or customer, make sure you only provide essential information to convey the concept.
You shouldn’t make the mistake of sharing all elements of how your product works. The only time you can divulge all critical information is when you are pitching to investors or lenders who will probably need to know everything about your product before investing in your business.
Apply For Provisional Patents
Have it in mind that the U.S. Patent and Trademark Offices provide provisional patents (PPA) to protect an idea or invention. Provisional patents are known to safeguard a patent during the 12 months before filing the formal application.
It also allows the inventor to pitch the idea, test its commerciality, and make adjustments on any prospective issues before completing the costly patent application. Note that the recognizable “patent pending” label is attached to patents during this provisional period.
Also, note that you can use this agreement as an effective protective measure if you intend to work with others on your idea. A non-disclosure agreement, or NDA, functions as an agreement between parties not to divulge their idea or share information with third parties. You can work with an experienced and qualified business attorney to draft an NDA with no expiration date, thereby ensuring you have very strong protection.
A trademark can also act as an extra layer of safety, especially since an organization’s identity is most often tied to its concept. By registering a trademark, you add more safety in the event of theft. The documentation that you complete when registering a trademark is written proof that the concept you are pitching is your original idea.
It also notes the exact date your concept was registered to you. You may decide to register your trademark with the USPTO, your state, or both, depending on the type of protection you need.
Always Research Your Audience
Whether you are pitching your business idea to a potential investor, a potential customer, or a contractor, it is advisable that you first research that particular person or firm before your appointment.
In this modern age, information can be easily accessed online, and you can easily research an individual before doing business with them. You can also search for any disputes with earlier business companions and validate that this person is well regarded in his or her chosen discipline.
Create and Document an Extensive Paper Trail
It is advisable you invest as much in writing as possible and save that documentation as proof of your idea in case of any litigation. Record your idea or concepts and also keep detailed notes of discussions and conversations where you are disclosing information to other parties. Have it in mind that the more details you keep in these records, the more useful they can be if an event someone challenges your ownership in court.
Consider Non-Compete and Non-Solicitation Agreements
Note that a non-compete agreement works almost like an NDA; however, it serves to prevent someone from starting a business similar to yours. Meanwhile, a non-solicitation agreement may work in conjunction with a non-compete agreement to prevent someone from stealing your employees or clients.
However, note that a non-compete agreement is expected to be limited in time, scope, and location. While it would be impossible to enforce an agreement that limits another person from starting a similar business anywhere in the country for the rest of their lives, the agreement may prevent someone from starting a similar business for five years within a 30-mile radius of your business.
Consider Work-For-Hire Agreements
This type of agreement can allow you to obtain help with your idea without giving up your rights. In a work-for-hire agreement, you hire someone to work for you to evaluate and improve your idea. Note that anything these individuals come up with to solidify your idea becomes yours. If you file a patent, this person you hire will be incorporated as a co-inventor on your patent. Regardless of the title, they own no rights to the patent.
Consider Trade Secrets Law
This is another way to protect your business ideas and ensure they are kept secret. The Uniform Trade Secrets Act (UTSA) protects trade secrets that have either actual or potential independent economic value because they are not generally known, have value to others who cannot legally obtain the information, and is subject to genuine efforts from a business to maintain their secrecy.
In the United States, note there are two common ways of stealing trade secrets. The first is via dishonest means such as stealing. Another is through a breach of confidence, like a former employee who had access to the trade secret leveraging it without permission or even selling it to another company.
If someone steals your secret, you may have a legal claim against them if all three of the above elements are present. But if your company fails to adequately secure your secret, you may have no recourse if someone misappropriates it.
Always Use Secure Communication
When discussing your ideas, you must do so over secure connections. In this technological age, hackers can often have access to ideas by simply hacking insecure communication channels. Owing to that, ensure you encrypt your communications to solidify protections and ensure your ideas don’t end up in the wrong hands.
These are some of the most notable ways to legally protect your business ideas when pitching to prospective stakeholders. However, note that the best option for you will depend on the type of idea and what you intend to do with it. Taking your time to evaluate all options with a business law attorney will guarantee you make the right choices moving forward.