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How to Protect Your Ideas During Product Development

For most solopreneurs, product development, prototyping and sometimes even some basic manufacturing need to come before too much legal work happens. Unfortunately, this can leave your great ideas open to intellectual property theft or fraud. One of the scariest parts of pitching ideas isn't getting turned down — it's your idea getting stolen!

If your product isn't yet finished, you probably don't have a patent on your idea, although you may have a trade secret or other available protections. Unfortunately, theft of any kind of intellectual property, including trade secrets, is common. Fortunately, you can protect your idea and yourself by taking a few basic steps.

Here are the basics of how to protect your ideas and other intellectual property (IP) without a patent, and how the IP system works for people developing new products.

Do your homework

Before you make your pitch, negotiate or collaborate with someone or another business, do your homework so you know everything you can about them.

If you're considering sharing your idea with a person, take these steps:

  • Check their references; don't give up if you can't reach them — being unable to reach them may be a bad sign.

  • Hire a professional to do a formal background check.

  • Pull their credit history and any financial records on them, including public records about bankruptcies.

If you're considering working with a business, take these steps:

  • Look for any records of legal cases or complaints against them, with local, state and national Better Business Bureaus and public records searches.

  • Find out how long have they been in business, and whether they existed as a different entity or under different ownership or names previously.

  • Research whether the owner(s) ran any other businesses before, or if they do now.

Doing this homework can't eliminate all possible issues, but it can ensure you won't do business with the least reputable people and businesses.

You should also do your homework getting to know the competition. This way you'll know which suppliers and contractors are already working in your niche, which are the best, and which you should avoid.

Use the right legal tools

Use the right legal tools and agreements to protect your intellectual property while it's still in development and you don't yet have a patent for it. Make sure any legal agreements you enter into legitimate; craft them carefully to meet your particular needs in every case. Here are the types of agreements you might need as you're developing your new product:

  • Non-disclosure agreements (NDAs) – When you need to share secret information about your intellectual property with someone in order to work with them to develop your idea and product, enter into a non-disclosure agreement. Use this kind of agreement to ensure that confidentiality is a formal condition for the relationship. Avoid including an end date to maximize your protection. There are two kinds of NDAs: mutual and unilateral. Mutual agreements hold both parties in confidence, while unilateral agreements state that the other party in the agreement can't reveal the secrets you're telling them about the product. If you're the only party revealing secret information, it's usually fine to use a unilateral agreement.

  • Non-compete agreements (NCAs) – Require a non-compete agreement for anyone you need to hire to work with you developing your product and using your information, ideas or processes. NCAs establish a time period, typically for however long the person is working with you plus a period of time afterward, during which that person cannot start their own competing business.

  • Work-for-hire agreements – This is often the right kind of agreement for people who help you develop or produce your product as you get ready to bring it to market. Work-for-hire agreements help you make sure that you still own not only your original idea, but any incremental modifications and improvements that come about as you bring it to market with the help of the people you've hired. It establishes that they are contractors working for you, and that you own whatever they create. This is crucial, because you don't want every person that ever touches your new idea or product claiming they are a co-inventor.

Use other protections for your intellectual property

The law surrounding intellectual property has created multiple ways for people with great ideas to protect themselves and their businesses. The law recognizes that patents may protect finished products, but there's a lot of ground to cover when products are still in development.

  • Trade secrets – If you are trying to protect your information, have kept it secret, and you are depending on that secrecy for its value, it is probably a trade secret. Protection for trade secrets is weaker than protection for patents, and theft of trade secrets is typically difficult to prove. However, various legal theories can provide you with trade secret protection in court, including breach of contract, breach of confidence and industrial espionage.

  • Trademark – The difference between trade secrets and trademarks can be confusing. Trademarks establish ownership of logos or other simple ideas or phrases that represent a brand or business. It is easy to apply for trademark protection and it costs just a few hundred dollars. Once your trademark is registered, it's easier to argue that the logo, phrase, or idea is synonymous with your brand — and so is whatever idea or invention that goes along with it.

  • Patent pending application (PPA) – If you want to protect yourself as you develop or pitch an idea that you're sure you'll be patenting, you can file a patent pending application. It costs around $100 to file the PPA, and the filing protects your product or idea for up to one year while the US Patent and Trade Office processes your application. When you see something marked “patent pending," that's what it means.

No one wants to risk losing a product or idea they've been working to bring to market! If you protect your intellectual property with all tools available to you, you're far safer, and you'll have the freedom you need to get your product developed.

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