You've just come up with a great idea for a business -- say, an interactive long-distance learning program to train stockbrokers for their licensing exams -- and you're sure that every brokerage house in America is going to want your product. You're equally afraid that if they get a look at it, or even get wind of what it is and the concept behind it, they'll create a similar program of their own and cut you out. Still, if they are your target customers, you're going to have to deal with them directly at some point. How can you protect yourself? At a minimum, you can file for copyright protection for any computer code you have written or commissioned, and you may also be able to file a trademark application if a trademark or service mark is involved. You may even be able, under certain circumstances, to apply for patent protection on your creation as a "business process" although the patent application process is both expensive and time consuming.
So, how do you protect your rights in and to the "concept" you have created, both quickly and inexpensively?
The answer may well be one of those nasty little nondisclosure agreements -- you know, those two or three page documents you have likely received dozens of times in connection with price quotes, new business plans, etc. You may have viewed them as a nuisance (and they can be if you are on the receiving side) -- and signed them without reading them, ignored them, or sent them to your lawyer incurring additional expense. They all seem so similar (or so you think) -- you will keep all information confidential, you will not make copies, you will return all copies, blah, blah, blah. But as the owner/creator of a new business concept, a properly drafted nondisclosure agreement ("NDA") can be your best friend, and a quick and cheap way to protect yourself from having your idea pirated.
Why sing the praise of the "lowly" NDA? Because of its flexibility. To obtain valid copyright, trademark or patent protection, your creation has to fall specifically within certain specific legal categories -- in other words, to get a copyright, you must have something copyrightable, to obtain a patent, you must have something patentable. What if your concept is something in between, or has elements of more than one of these categories? What if it constitutes a trade secret or some other form of what we lawyers call "intellectual property" that doesn't have a specific mechanism (like filing) for protection? In general, many new business ideas do NOT fit neatly into any such category, and only the flexibility of an NDA can adequately cover all aspects of the concept. Again, the wording of the document is key - to insure that all aspects of the concept are protected, as is obtaining protection for the underlying elements (copyright, trademark, patent), if applicable..
Of course, having an NDA is not enough. If you claim that your idea is confidential, don't act in a contradictory way (by, say, talking up your idea and its components in the local press). If you claim it is proprietary, don't use someone else's property in your package without appropriate permission. Most importantly, don't let having an NDA substitute for using your judgment in giving out your business plan in the first place. The best worded document in the world can't protect you from bad people. That said, get yourself a experienced lawyer to prepare an NDA for you (not one "off the shelf"), get it signed, and go to it!
Disclaimer: This answer should not be relied upon as legal advice. I am admitted in the State of New York only. The response above does not form an attorney-client relationship, nor it is intended to be anything other than the educated opinion of the author. Consult an attorney in your geographic area before you act on any of this material.
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