What should tech startups do to legally protect their business?

Many new and aspiring business owners are reluctant to share their new business idea. The is of course a risk that by sharing an idea with others that the idea could be copied and produced as a competitor. While this fear may be founded, you should understand how you can legally protect your startup, as there are a few options.

Over the last 5 years, the rate of business creation within the tech industry has continued to increase so it’s important for all new ventures to protect their identity.

Can a business startup protect an idea?

You cannot protect a business idea. This comes as a surprise to many new business owners. While a business idea cannot be protected, creative expressions of an idea can be protected. Examples of artistic expressions can be a painting, an article, a song, music or a poem. All of these are protected by copyright. A business idea itself is not considered an artistic work and cannot be protected.

The name, however, under which a startup proposes to trade could be registrable as a trademark.

Similarly, if the business idea is to produce or make a new and innovative product then, this creation/invention may be protected through a patent. Every case is individual and should be referred to an expert before a decision is made.

How can you protect a startup?

Use a non-disclosure agreement (NDA) – As in most cases, you cannot protect a business idea, an NDA is a great option and can be used to prevent other people and companies from sharing the idea. Developers, employees and others with whom you share your idea with can be bound by an NDA.

An NDA is a legal contract between two people or entities that states what information will be shared between them and what information cannot be shared with other people or companies.

Some cautious tech startups have a policy of getting everyone to sign an NDA including investors. Some consider this to be an unnecessary step so it is advisable that you remain flexible when dealing with investors, especially when they have a large stake in your business.

Some cautious tech startups have a policy of getting everyone to sign an NDA including investors. Some consider this to be an unnecessary step so it is advisable that you remain flexible when dealing with investors, especially when they have a large stake in your business.

Start building your business beyond the idea stage – As a tech startup, you will have to create an initial base code, which could be eligible for copyright protection. If you hire developers to work for you, then you should ensure to assign the copyright to yourself as the business owner. Copyright protection relies on clear ownership and you should keep all records that prove creation and/or authorship so that the copyright can be verified.

One area for consideration is that open source frameworks and platforms (WordPress, Drupal and others) are copyright of their creators and are available under specific creative licenses. You should know that if you are to build any part of your startup using these or other open source tools, you will not be protected under copyright laws.

Consider filing a patent application if possible – A patent protects new inventions or improvements to these inventions that have unique features or elements. However, in the UK and the EU, computer software programs usually cannot be protected by filing a patent. There are exceptions to this rule, but you have to create a new method or coding process to obtain a patent.

A software app or part of it may fulfill the necessary requirements to obtain patent protection. It is best to get advice from an intellectual property professional who can advise you on whether your tech startup is protectable through a patent.

If you are in the process of creating a totally innovative product that didn’t exist before, then a patent may be necessary so that you can aim to prevent others from making unauthorized use of your innovation.

Patents are usually quite expensive so you should allocate a budget for a patent application.

Protect your brand by a trademark – Unfortunately, many successful startup ventures don’t bother with filing a trademark and allow others to use their brands. By filing a trademark, a startup may prevent others from using and registering identical or similar names and this will avoid trademark confusion among potential customers.

A trademark will make it easier to enforce your rights and to stop copycats in the markets you plan to trade within. You can trademark your name, logo, slogan and even a specific design. By registering a trademark in all jurisdictions where you trade and make business, you will protect yourself from being copied by others.

Having a tech startup can be hard work. Knowing how you can protect it is important. If you are in the position to file for a trademark, use our free trademark search service to the first check if a similar or existing trademark has already been filed. Our expert team offer cheap trademark registration in the USA, Canada, EU, UK and now Australia too, to support your business, whatever stage it may be in.

By |2019-06-06T03:26:43+00:00October 27th, 2018|Trademark|0 Comments

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Anita Mar
CEO and Registered Trademark Agent at Trademark Angel Inc.

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