How to protect your business idea from being stolen (and what to do if it happens)? | KISS digital

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How to protect your business idea from being stolen (and what to do if it happens)?

How to protect your business idea?

I have a business idea no one has ever had before! I need to consider it a bit more, improve it, develop it with some super digital agency, and then I will reap the fruits of the project. There is only one thing I am afraid of - that someone will steal the idea. How can I protect it from being stolen?

Let's start with bad news and good news at the same time. Your business idea is certainly valuable, but at this stage only for you. The probability that someone "from outside" will be interested in it, otherwise than just being polite, is relatively low. The reason is simple: there are plenty of business concepts on the market. There are currently about 300 million startups worldwide, nearly 3 million apps are available in the Google Play store and more millions of business concepts are waiting to be implemented.

Companies that would be potentially interested in taking over your idea try to put their own ideas into practice, believing in them as strongly as you believe in your concept. This does not mean that your business project is not perfect. Maybe it is. Therefore, it should be protected. However, it is not worth worrying that the idea is actually at risk of being stolen and that someone is lying in wait for it.

Business secret, i.e. the law helps those who are discreet

The basic preventive measure protecting a business idea from being stolen is discretion. It seems obvious but it is worth mentioning because problems are often caused by trivial negligence. Discretion is important not only for practical but also legal reasons. Being discreet is key to protecting the so-called business secret (also: trade secret). It is a legal term that refers to "any technical, technological, organizational information, or other information of commercial value, concerning an enterprise, undisclosed to the public, with regard to which an entrepreneur has taken necessary steps to maintain confidentiality".

In other words, information constitutes a business secret if it meets three cumulative conditions:

The business secret is, therefore, subject to legal protection on condition that the entrepreneur has – attention! – a “recognizable” will to keep it a secret. Without such a clearly expressed will, even if the information is unknown to third parties at the given time, it will not be regarded as a business secret. However, it will remain so even if we share it with people obliged to keep it confidential, e.g. under an NDA agreement.

Copyright can protect your code, but not your business idea

When it comes to protecting business concepts from being stolen, discretion is all the more important because such ideas cannot be copyrighted. – Ideas, even the most revolutionary ones, in most cases are not protected under copyright law, as pointed out by Rafał Wysocki, legal adviser, specialist in new technology law, who has been running his own law firm in Krakow for over 10 years. Someone who was the first to create such software has no monopoly on the production of such software in the future. In Poland alone there are at least several hundred products of this type. The situation is similar with web or mobile applications, the expert explains.

Does this mean that apart from discretion, we have no tools to protect our concept? Not exactly. A lot depends on what we understand by the concept of a business idea. If the concept is a solution that can be concluded in a few paragraphs of the text, it will be rather difficult to copyright it.

If the idea is at an advanced stage of development and includes ready-made creative elements, the chance that it will be legally protected is greater. – Take a web application as an example. It consists of both the code and the conceptual and visual layer, i.e. the design, functional layout, colors, UX elements, and also the name, which further individualizes the product. All of this creates a subject that can be protected under copyright law, Wysocki explains. If, in addition to the creative aspects, the concept is also technical or technological in nature, it can also be protected under the provisions on business secret (unless it is already protected by a patent).

However, this is not an either/or issue. The condition for copyright protection is the creative nature of the solution. – In the case of an algorithm that counts the net and gross amount under the VAT rate, we cannot speak of a creative and innovative project, the lawyer notes. Therefore, such a product will not be subject to legal protection.

Where then is the borderline between creativity and reproduction? It is hard to say. It depends on the specific case. It is often determined by the "context", i.e. the nature of the project where a given solution, e.g. code, is a component.

– If we are dealing with a copyrighted solution that is part of a larger creative project, there is a greater chance that the code or visual identity will be protected under copyright law, as explained by the expert. Just a chance because when a disputed situation occurs (e.g. someone actually "gets inspired" by your idea) and the case goes to court, it will be settled to a large extent on a discretionary basis.

How to copyright the name and logo to better protect your business idea?

Among the elements that can make up a business idea, the name is an exception. Usually it is not the essence of the concept, but it is often of great importance in its implementation. Therefore, it is good to know that it can, and even should, be copyrighted: both as a word mark (company or project name) and as a word and figurative trade mark (logo). This can be done at the Patent Office by applying for trademark protection. You should check beforehand whether the name is already registered.

We are not going to describe the whole procedure here, a detailed overview of the process and its costs can be found on website. Table of application and protection fees is available HERE. It is worth adding that if the business is to have an international reach, extending the territorial scope of the use of the trademark to other countries will be a good idea.

A separate but related issue is the registration of the domain corresponding to the name of the project. We discussed this topic more in one of the previous texts: “Domain for startup. What is it, how do you choose it and where do you get it from?". To put it briefly: it will be perfect if you manage to register a name directly in the .pl domain (if you want to operate on the Polish market), as well as the .com domain (if you want to operate on the international market).

Court, OCCP or mediation? What to do if someone steals your business idea?

Registering a name and logo is a bit tricky (domain registration is simplier, unless there is a need to purchase it from its current owner), but if you complete the formalities, you get unconditional trademark protection. Copyright is more convenient in this respect as it does not require any official action and provides protection of the creative work in an automatic mode. The problem is that it is not as "unambiguous" as a trademark because the object of the protection is also devoid of this "unambiguity". As a result, disputes related to cases of alleged theft of an idea or rather a specific achievement are more difficult to resolve.

– In such a situation, it is crucial to show that we are the author of a given solution, i.e. most often to demonstrate that we were the first to create this project, Rafał Wysocki explains. What institutions can help us in our dispute with the competitors we accuse of plagiarism? The Office of Competition and Consumer Protection (Pol. UOKiK) or a common court. Usually, however, cases do not go that far. – Most often such conflicts are solved by mutual agreements, the expert says. Not only because nobody wants to spend many hours in courts and cover the costs of proceedings. – Cases where a company operates in a very "offensive" way and commits a gross plagiarism are rare. Usually, disputes arise from carelessness, e.g., two companies introduce two similar products on the market independently of each other in a short period of time, the lawyer explains.

It is also possible to refer the case to mediation. This is an increasingly common form of dispute resolution. These types of proceedings are conducted by qualified experts – lawyers or "practitioners" who know the realities of a given industry. Therefore, there is no fear that issues related to code authorship will be resolved by a lawyer dealing with family conflicts. Lists of mediators can be found in common courts.

Do you want to protect your business idea? Work with companies that care about data security

Mediation is certainly an exciting experience, but it is better to prevent it. The basic precaution is the aforementioned discretion. It is worth extending it with technical safeguards and various "good practices", such as protecting computers against intrusion, using paper shredders, controlling access to the company, securing rooms where equipment or documents with sensitive data are located, etc.

Information security issues are regulated by the international standard ISO/IEC 27001. However, it is worthwhile to read the recommendations and implement at least some of them. It is also a good idea to pay attention to how your business partners approach data security. A company that has the ISO/IEC 27001 certificate - like KISS digital - can take care of information security in a more professional way than a company that has not heard of such a certificate.

Regardless of who you are working with, it is always worth signing the so-called non-disclosure agreement (NDA). – Signing an NDA has two benefits. First, it gives you a fairly solid guarantee that a person or company that gains access to sensitive data will not disclose or misuse it. Secondly, such an agreement certifies that the information covered by that document falls under a business secret and the entrepreneur has taken appropriate steps to protect the secret, Rafał Wysocki explains.

Of course, in order for the NDA to be effective it should provide for the consequences of breaching it in the form of a contractual penalty. It is up to the parties who sign the NDA to determine the amount of the penalty which is usually proportional to the value of the information entrusted. In KISS digital we suggest the client to sign a confidentiality agreement already at the initial stage of contact. It is simply a convenient solution that provides a good mood and a peaceful sleep for both parties discussing their interests.

If you want to develop your business idea in cooperation with a company that takes business secrets seriously and adheres to the highest standards of data protection – contact us.

Przemysław Ćwik

Senior Editor.