How to Prevent Someone from Stealing Your Million-Dollar Idea
Back in the day, my dad was not only a great entrepreneur—taking his single carpet store and turning it into 20—but on the side, he was also quite the inventor.
One of his first inventions was a machine that marked length on the back of carpet rolls automatically as they came out of the mill. I have the bronzed patent for that device hanging on my office wall.
Unfortunately, the machine never quite worked as advertised as it bled ink through and onto the carpet.
But that never stopped dad. He always kept tinkering.
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The million-dollar business idea…
A few years later, my dad came up with another idea—one that we are all much more familiar with—the robocaller.
Dad thought of the robocaller back in the 70s when telephone answering machines had become the hot new thing; they were basically the iPhones of their day.
One day, while recording the outgoing message for our answering machine at home, the big idea materialized. He thought to himself:
Wouldn’t it be great if, instead of taking a call and playing a recording, the machine could make a call and leave a recording?
His eureka moment had arrived.
… That someone stole
Although my father was innovative, he was not an engineer, being more of a “big picture” kind of guy and all. Because of that, and knowing he had just had a Very Big Idea, dad hired an engineer to help him create a prototype.
When they were finished, dad had the engineer come over to our house one evening and demonstrate the final product. Dad pressed a button, and we could hear the robocaller call a number and then play a pre-recorded message. And then it hung up, and automatically did it again. And again.
We had ever seen anything like it.
Late that night, with all of us excited and exhausted, the engineer thanked us, packed up the prototype, and bid us a good night.
We never saw him, or the machine, ever again.
The next day, the engineer wouldn’t answer the phone. So dad drove over to his shop to see what was up. He found it abandoned. The guy had skipped town.
This was a big blow, to say the least, for my dad and our family. Had he properly protected his intellectual property, we would all be gazillionaires today.
How then, do you avoid the same mistake my dad made? Here are three critical things you must do to safeguard your million-dollar business idea.
How to protect your business idea
1. Don’t be afraid to hand out non-disclosure agreements
An NDA, or non-disclosure agreement, is essential as soon as you have a great idea. Often, and especially in the early stages of a new project, you will want and need to share it with outsiders. But how can you be sure they won’t steal your idea?
Get them to sign that NDA, that’s how. An NDA essentially says,
“I have confidential ideas and information that I want to share with you, and you agree not to use them or share them without my permission.”
While it won’t stop the totally unscrupulous, an NDA will get most people’s attention.
As such, make sure that each person you work with signs the NDA before you share your idea with them, no matter how much you know or trust them. Seriously.
- Employees: Include it in your employee handbook.
- Business partners: Ask them to sign one too.
- Vendors: Include the NDA at the same time you’re putting together a business contract.
You can find a good NDA online, or you may want to have your lawyer draft one. Indeed, a carelessly worded NDA may not end up protecting you at all.
And that brings us to the next point:
2. Hire a good lawyer
Hiring a lawyer is one of the key steps that my dad missed. You will need someone throughout the whole process to keep you and your big idea safe. Here’s how to find the right kind of lawyer.
Look for intellectual property lawyers
You don’t want just any lawyer—you want one who specializes in “intellectual property,” that is, patents, copyrights, and trademarks for businesses.
Ask for recommendations
Word of mouth is one of the best ways to find a reputable lawyer you can trust. Ask a colleague or friend about their legal representation. Post in any small business Facebook groups or LinkedIn communities you’re a member of.
Ideally, you will work with an attorney who comes highly recommended. If you can’t get a good recommendation, then it’s time to turn to Google.
Don’t be cheap
Hiring a top-notch intellectual property lawyer is one of the smartest investments you can make as a business owner. No, you don’t want to blow your dough, but you don’t want to be careless either. This is one of the many situations in which finding the best bargain is not your best bet.
Some lawyers will let you pay in installments, and others will accept equity as partial payment. Ask around if those options make sense for your stage and type of business.
3. Protect all your intellectual property
Having your lawyer protect your intellectual property is the most important thing you can do when you’re working on a big idea. All three types of intellectual property protect different things:
- Copyrights protect original pieces of work, like music or software. They’re created automatically. In fact, this sentence is copyrighted as I write it (although registering any copyright with the United States Patent and Trademark Office, USPTO, gives you additional protections).
- Trademarks protect unique phrases and symbols, like the Nike swoosh and the tagline, “Just Do it.” That tagline and symbol represent Nike, distinguishing the company from others in the space. Lawyers are usually needed to help get a trademark.
- Patents protect inventions, like my dad’s robocaller, and a lawyer is definitely needed as the process with the USPTO is not simple.
Your lawyer will help you determine exactly which type(s) you need protected.
A common story for entrepreneurs with big ideas
My dad certainly isn’t the only entrepreneur who has had their big idea stolen. Indeed, there are plenty of inventions out there whose rightful creators have been snookered.
Take radio, for example. Right before the 20th century, Nikola Tesla invented and patented Tesla coils, enabling message transmission over long distances. Around that time, another inventor, Guglielmo Marconi, was trying to invent something similar.
Marconi shamelessly started using Tesla’s coils in his attempt to create such a device. But Tesla, much like my father, was a very trusting person. He didn’t mind that Marconi used his patents for his newfangled radio experiments. However, in 1904, Marconi received full patent ownership and credit for the radio, despite how heavily he relied on Tesla’s creations.
So no, you don’t want to end up like Tesla—or my dad.
Note that nothing protects just an idea.
An idea is just that, an ephemeral notion. But to make it worth something, you have to take concrete steps towards manifesting that vision before the law will help you own and protect it.
The good news is that once you do, and once you protect your business idea legally, then, well, you are protected legally.
Nothing can stop you then—not even a pesky robocall.