How to Protect Your Valuable Business Ideas

From Power of Business (powerofbusiness.net), an Extension initiative, and our eXtension community, Entrepreneurs and Their Communities, welcome to Small Business Week+. Extension supports small businesses and their development as a part of our land grant mission. For the next few days, we are highlighting small businesses and the ways we partner and support this important economic sector.

Guest Blogger: Richard Proffer, Business Development Specialist, University of Missouri Extension

Intellectual property sign

Intellectual Property (CC) Traci Lawson, on Flickr

Every business has ideas it has developed to do things more efficiently. Or the business owner has come up with a way to produce his product in a manner his competitors cannot copy. Better yet, the owner has devised a variation on an existing product that makes it more durable in the marketplace. A business customer list is also an example. These ideas or innovations are important to a business’s success and allows them to gain competitive advantage over their competitors.

But how can an idea be protected? They first must be tangible and able to be seen, read, touched or in some other physical form. If a business owner has no way to protect these new ideas then the chances are they will never see the light of day. The rest of society will not benefit from these new opportunities. There are four legal ways to protect your idea: patent, copy right, trade secret and trademark.

The first one – patent – is the most common way. Here the inventor files a disclosure on the invention with the U.S. Patent & Trademark Office (http://www.uspto.gov/) to review. This office is responsible for making sure the idea is able to patented. There are three types of patents: utility, design and plant.

With a utility patent, you obtain protection on how a product is used and works.

The design patent then only pertains to the way the product looks.

Finally the plant patent is aimed to protect new species of plants that are bred. There are some types of plant creation that is not covered so make sure you check into the possibility if you invent some new types of plants.

The second type of protection is a copyright. These protection devices are also managed by the Federal Government at the Library of Congress (http://www.copyright.gov/). This method protects an author’s rights to original creative works. An interesting website on copyright is www.templetons.com where they have an article on the top ten myths of the topic.

Next, we have trade secrets which are handled entirely differently. They are not protected through Federal registration but through the legal system on all levels – federal, state and local laws. Some factors that determine if your idea is really a trade secret is:

1) How many people know it outside the business (hopefully none is the answer)
2) How many people, within the business, know the secret (hopefully few)
3) How is it be safeguarded
4) How important would it be to competitors
5) How much did it cost to create this idea

If a business wants to protect information, it should keep in mind the above five questions as those efforts will help a court realize you are serious about this idea. As you can see from the questions above, a trade secret deals with the operations of the business and not information dealing with payroll for example .

The final way to protect your idea is through a trademark. These protection techniques are registered at the state level (usually at your secretary of state office of the U.S. Patent & Trademark Office (http://www.uspto.gov/). Here you are dealing with a recognizable sign, design, or expression that clearly identifies the product or service of a particular company. An easy example is the Coca-Cola trademark for Coke. Trademarks have their roots as far back as the Roman Empire where blacksmiths would mark their swords.

So even if you are a small business but have creative ideas, you can gain protection for your ideas.