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4 ways you can legally protect your tech start-up

4 ways to legally protect a tech startup blog post image

Many new entrepreneurs are very secretive of their new business idea. Their thinking is that if they were to share a business idea with others, they risk being copied. This is sometimes an unfounded fear and it is worth understanding how your startup can be legally protected and what options you have.

Can an idea for a startup be protected?

An idea itself cannot be protected under any intellectual property right. However  expressions of an idea can be protected, for example when they are artistic in nature, copyright could subsist. Examples of this include a painting, a poem or a song. A business idea itself is not considered an artistic work. This is why it cannot be protected as a copyright, but once you start building the business, if it requires original coding then you  could be copyright protected. The name under which a startup proposes to trade could be registrable as a trade mark, as another example.  Similarly, if the business idea consists of producing an innovative product then there is a potential to file a patent.

In what ways can my startup be protected?

Use a nondisclosure agreement (NDA)In cases where the business idea itself cannot be protected by an intellectual property right, as is often the case, an NDA can be used to prevent others from sharing or benefitting from the idea. Developers, employees and any others you share your idea with can be bound by an NDA. An NDA is a legal contract between two people that states what information will be shared between them and what information will not be shared with other people.

Some entrepreneurs have a policy of getting everyone to sign an NDA including investors. Some investors consider this to be an unnecessary step so it is advisable that you remain flexible when dealing with investors. They come across a large number of ideas and their intention is not to copy the ideas, only to judge their suitability for investment.

Read our blog post on 7 ways to legally protect your mobile phone app 

Start building your business and obtain copyright protectionAs with many tech startups, you will have to code it, which could attract copyright protection. If you are getting developers to do the work, then you can and should ask them to assign the copyright to you. Copyright protection arises automatically  in most countries and it is important to keep all records evidencing creation/authorship so that the copyright can be verified.

It is worth mentioning that open source frameworks and platforms (WordPress, Drupal etc.) are copyright of their creators and are available under specific creative licenses. If you to build any part of your startup using such open source tools, you will not be protected under copyright laws.

File a patent application if possibleA patent protects new inventions. In the UK and the EU, computer software programs are generally not patentable. There are exceptions to this rule, but you have to create a new method or process to obtain a patent. A software app or part of it may fulfil the necessary requirements to obtain patent protection. It is best to get advice from a patent attorney who can advise you on whether your tech startup is patentable.

If you are creating a new innovative product, then a patent is absolutely necessary so that you can financially exploit your product and stop others from making unauthorised use of it.

Register a trade mark for your brandIt is incredibly common to see the names and brands of successful startup ventures being used by others. Identical or similar names are considered trade mark infringement in certain circumstances and registering these as trade marks, assuming they fulfil the requirement of distinctiveness. A trade mark will make it easier to stop copycats in the markets you have filed your trade mark in. You can trade mark your name, logo, slogan and even a specific design. This is one important method of making sure your tech startup is protected from being copied by others. Especially your branding.

Having a tech startup can be hard work. Knowing how you can protect it is important. After all, you want to benefit from your hard work and not have to worry about being copied.

If you need help or advice about intellectual property (IP) protection for your startup, please contact us on 0207 791 9050 or email us on trademarks@freemanharris.co.uk

Is an NDA worth the effort?

Are NDAs worthless?

In simple words, a non-disclosure agreement (NDA) protects the trade secrets of an individual or company from plagiarism or exploitation. They identify what information can be shared with another party and establish how it can or cannot be shared.

NDAs are commonly used nowadays. Most online startups have standard NDAs in place, which are used in different scenarios. A couple of examples are listed as follows:

  • A startup shares their business idea with an outsourcer i.e. a developer. The developer might be asked to sign an NDA to keep the business idea and activity confidential.
  • A prospective business partner is given confidential data and is asked to keep the data confidential.

There are many other scenarios which will warrant a use of an NDA, but you get the idea.

How effective are NDAs?

A correctly drafted NDA will provide protection for your confidential ideas or information. It creates a contractual agreement between two parties, and should indicate the seriousness of any breach that may occur.  The important aspect to focus here is the term ‘correctly drafted NDA’. Most people have a tendency to copy NDAs found online. This creates two issues, the NDA isn’t fit for your specific purpose and are often too vague to be considered effective.

An NDA should describe the information that is being shared in good detail. It’s important to note that the information has to have value and must not exist in the public domain. If you’re protecting an invention through an NDA and you have made a patent application, then there is no need for it. In case of a breach of an NDA, the onus will be upon you to prove that the information had value and wasn’t available publicly.

In most cases, businesses are looking to protect their idea through an NDA. What they fail to understand is that most of the ideas already exist, or something similar at least.  So it seems like a lot of unnecessary work to protect something that is already void.

Though this isn’t to say don’t pursue your ideas, because ultimately there is a lot that goes into making an idea a success, a brand, investment, advertising and lots more, and not everyone has the whole package, or a successful one.

Enforcing an NDA

Enforcing an NDA is a difficult task. It would involve detailing what information was disclosed, how it was misused and the potential losses incurred. If the case were to be taken to court, it can be a drain on time and money. It involves lawyers, lots of research and outcome won’t cover the costs you’ve spent on taking the breach claim to court.

Most startups would not have the funds to sue a party for breach of their NDA. Even if they were to win the case in court, the compensation wouldn’t cover the costs incurred.

If not an NDA, what else?

Business owners and their employees should identify what information can be truly classified as a trade secret and use an NDA if necessary. You can also follow a few basic tips which will keep you away from using an NDA:

  • Only disclose valuable information to reliable people, with a good track record
  • Only reveal the necessary information that is appropriate for a specific time
  • A little trust goes a long way; getting investors to sign NDAs is seen in bad taste and your business ideas are often not valuable information

If you feel an NDA can be a deterrent in any situation, then you should use a correctly drafted NDA. Be sure to know that information is truly a secret, and finally enforcing an NDA isn’t easy or cheap, so know the consequences of a potential breach.