One key note about searching for patents on your idea is that the lack of a patent does not mean your idea is patentable. Many ideas and products are brought to the marketplace without patents or other IP protection. So if you can’t find it with Google and patent searches, it may be an idea that has come and gone and failed for various reasons, but you can’t patent it, because it is prior art. Prior art simply means it’s been done and publicly released. But keep in mind that if you still think it’s a good idea, you may be able to remarket the idea or product.
IP Strategy
Intellectual property (IP) is a big buzz word these days. It’s important stuff. If you can convince the US government (or other government) that you have an original idea, they will help you protect and give you exclusivity of it for a period of time, generally 20 years. That sounds great, doesn’t it? You can also file a provisional patent that is kind of places a foot in the door which discloses that you are working on an idea, but you aren’t ready to file a patent yet. If you file a patent based on your provisional, you’ll get an earlier file date.
Ultimately what you want is a Utility Patent. You want to patent the actual utility of what you’ve created. Those are the good ones. There are other types like Design Patents, but they are more easily circumvented.
Above while I was talking about the government helping you protect your idea, they will only do so much. The patent office does try, and they do a decent job, of making sure the patent they give you is unique, however they are not the only opinion that matters. In the case where two issued patents have overlap, people can go head to head for years dumping tons of money into lawyers trying to get injunctions or other compensation in place. Alternatively, you may have protected IP and someone else is selling a product which infringes on your patent. It will cost a good bit of money to make them stop. The old line is that a patent is only as good as your pockets are deep.
So why patent at all? It’s a reasonable question. In general, patent what you can with the finances you have, but don’t go overboard. Or, you can always take advantage of some other techniques like “first mover advantage” or “first to market”. Coke doesn’t have a patent on the drink itself, but people can’t copy the true ingredients. Coke has a trade secret on their recipe and they have proven that they go through extraordinary efforts to protect it. The proof of how hard they protect it, and it actually being unique, provides them protection.
Footnote: I’m not a big fan of patents. Not because I don’t think a patent is cool, but that they get way over used and big business has ruined it for the common inventor. I do think they are very good for impressing your mother, and who doesn’t want to do that.
General Protection Mechanisms
So you are going to need to talk to someone about your ideas, as no one can do it themselves and you have to build a team. So the first step is to have a Non-Disclosure Agreement (NDA). This is a basic agreement between you and to whom you are talking to that they will not disclose your discussions and they will not benefit from them (unless you end up hiring them in some way). These are basic agreements. You can download them for free/almost free. They are a good first step. If nothing else, it sets a clear expectation that you expect your conversations to be between you and the other party. If you don’t trust the other person, the NDA probably won’t mean much. Also, many people won’t sign them. Investors typically won’t as it exposes them to risk, as they tend to see a lot of deals and ideas. They may already know 3 people working in that space. The suggestion here is start out slow, and make sure they have a legitimate interest. As the relationship grows, they may sign an NDA and get more involved with your venture. On a side note, most professionals only have their integrity and reputation. We know not to talk about other people’s ideas or to try to leverage information given in confidence.
Keep your mouth shut. Not everyone at the bar on a Saturday night needs to know about your whiz bang idea. Be careful about who you speak to about your idea. Think of it as a need to know kind of thing.
Also, as you getting started with your team, you may be thinking, “We’ll figure out the money later” type of thoughts. No, do it now, while there is nothing to argue about. Money makes people weird. At the very least create a rough operating agreement that you sign with your ‘friends’. Talk about the ownership distribution, who does what, and how a person can leave or come in. Just get some basics out of the way. If the money starts rolling in, the last thing you want to do is start fighting with your co-founders about who owns and does what. It will be over before it begins.
Also, keeping ownership straight, everyone should read up on the Copyright Law of 1976. It talks about who owns things when you hire a contractor if not otherwise agreed to. Make sure you understand the agreements you sign with contractors, especially dealing with ownership and rights. Yes, it is possible for you to pay for something and not own it or full rights to it. There are all sorts of variations here where a contractor may become part owner (sweat equity) or a manufacturer may partner with you. The key here is to make sure you understand the agreements.