What to know about IP theft
Sure, there is a danger in sharing your ideas. There is always a risk of intellectual property theft. But that’s not what cripples entrepreneurs from moving forward. It’s the fear itself that keeps entrepreneurs from growing their company and sharing their ideas. They hear horror stories of IP theft and it’s so terrifying that it keeps them from expanding upon their idea. There’s this irrational fear that rival companies are waiting in an alley for the opportunity to pounce and steal your idea. That’s simply not true.
Now, that’s not to say you should just go shouting your idea from the rooftops. First of all, that’s a surefire way to get checked into the nuthouse. Moreover, instead of being terrified that another company will take your idea, why not try protecting it? That would allow you to share your idea with investors and potential entrepreneurial partners anxiety-free.
Here are three steps to protect your startup idea.
The majority of IP theft happens within a company
You’ve probably already heard the story of Steven Blank, a Silicon Valley businessman and now adjunct professor of entrepreneurship at Stanford University. He had pitched an idea for a marketing automation system to a big investor and his associates. After almost a year without hearing back from this investor, it was brought to his attention that his entire presentation was stolen. By who? Well, that’s the kicker. It was stolen by the very investor he presented to. The only thing more insulting would have been for his mom to have stolen his idea.
“As an entrepreneur, you hear stories like this and you fall victim to paranoia. You’re overprotective and neurotic so much that you mandate people pass a background check and a blood test before they can hear your idea,” Blank says.
Even after all of this, Blank never brought litigation upon the investor. Surprised? See, presentations and pitches only give away big picture details. There was really nothing to steal. Your startup employees and management figures are the only people who truly grasp and see firsthand the execution of your idea. Protecting your startup’s future starts with understanding this very fact.
Seek legal help to get things in order
Did you know that if your employee creates a piece of IP, he or she own the copyright to it legally? That’s right. Even you, the founder, cannot claim copyrights to it. That’s why you need a good lawyer to put your non-disclosure and non-compete agreements in order. They can even tell you what parts of an IP piece can be copyrighted, patented, or trademarked. Remember, if you don’t have your legal documents sorted out, any of your employees can just walk away with integral information.
At first glance, it might look like getting an attorney involved shows you don’t trust your employees. “In my experience, getting a lawyer involved actually helps the trust between me and my employees. You start seeing mistrust when you’re lax about your agreements. Once those documents and non-disclosures are signed, you’ll see a substantial increase in trust. Nobody wants to get in that much trouble,” Blank said.
Invest in ideas that are not easy to steal
Look, you can protect your idea with the legal team of Suits, it will all be for naught if it’s easy to reverse engineer. Yes, it’s true that just about anything can be reverse engineered to an extent. But the point is to focus on ideas that are difficult to copy, not impossible to copy. That, in itself, is pretty impossible.
“I’ve worked with many startups, and the ones that succeed are those that understand the strengths and weaknesses of legal protection. The winners understand that the documents exist to serve the business model and enhance growth. They aren’t a panacea, and they won’t help unoriginal ideas become successful,” explained Blank.