Like your stomach is yanked through your mouth while all the oxygen is simultaneously sucked from the room. You feel overwhelmed, helpless and foolish for making one of the classic blunders and trusting the wrong person with your information.
It may have happened in the workplace where a colleague passes off one of your ideas as their own to beat you to a promotion. It may have occurred in a confidential environment, such as a job interview, where an original idea shared to establish your credibility, originality and employability, is misused to that employer’s personal benefit. Worst of all, your idea for a new entrepreneurial or business venture may be stolen by a competitor. This can happen either through information you share directly with that person before launching, or through copycat behaviour once your business is established.
Both scenarios can have a serious negative impact on your personal wellbeing and that of your business. At the end of the day, nobody enjoys sitting in a reflective mood humming a sad rendition of Sufjan Stevens’ “Should Have Known Better.”
When someone steals your business idea, you have a few options:
1) take the higher ground and do nothing; or
2) learn from what a lawyer in your position would do and find a mechanism to protect yourself and your business the right way.
A Long History of Idea Thieves
As human beings, we are hard-wired to share. We love to spread word of our achievements and success.
In the case of an exciting new business or entrepreneurial venture, our propensity to share a new idea can often mean taking a risk and revealing sensitive information.
This split-second decision to exercise trust over caution has defined the careers of many experienced business owners and entrepreneurs. Some of the most famous business ideas in history, for example, were ripped off from someone else. Think Facebook, Twitter, Hulu and Paypal.
These successful enterprises were built on the back of someone else’s idea.
In Australia, a few options are available to you if someone rips off your business idea.
Working Smart: Is It Legally Possible To Protect A Business Idea?
When someone uses your business idea without your permission, your chosen course of action will depend on your specific circumstances and the outcome you seek.
In Australia, protecting an idea under Copyright laws is extremely difficult.
Jamie White, Solicitor Director & Owner of Pod Legal, explains:
It is very difficult to protect a business idea or concept in Australia. Copyright law most certainly won’t protect an idea itself, it will only protect an expression of an idea.
For example, if you have an idea for a new home delivery service, then copyright would only protect your written documents, diagrams or manuals relating to, or describing, the idea.
In some circumstances, a patent may be granted for business methods, processes or products. However, minimum thresholds must be met in terms of inventiveness and innovativeness.”
This means that if someone acts on information that you express to them during a casual conversation, there is very little you can do to protect that original idea, or prevent that person from acting on your information and launching a competing business.
Taking On The Big Bad Fox: What Are Your Legal Rights If Someone Uses Your Business Idea Without Your Permission?
An understanding of your basic rights puts you in a solid position to protect yourself against opportunistic idea thieves.
If you’re not careful, people with their eyes and ears open to fresh opportunities can easily shoot your business out of the water before you even start.
If you have an idea for a business you have not yet launched, or an idea for a new project for your existing venture, plan a watertight strategy to protect yourself and your business from imitators.
When it comes to protecting your business ideas in Australia:
It is very difficult to prevent a person from using or copying your business idea.
Therefore, it is very important to ensure that a good strategy is implemented when launching a new business idea. For example, it may be very useful to keep plans around the new business idea confidential until such time that the idea is launched. This may be achieved via the use of confidentiality agreements and can increase the lead time before any imitators launch their offerings. Also, a strong distinctive brand name for a new offering can be of big benefit, ensuring that consumers are aware of the source of a new product or service and it is not confused with any imitators.
Finally, hitting the ground running with a new idea – this can assist to ensure that you enjoy exclusivity for a longer period of time” explains Jamie White.
Trust No One: What If Your Business Idea Is Communicated In A Confidential Environment?
In certain situations, it is easy to be lulled into a false sense of security about the level of detail you share about your business ideas.
In environments such as employment interviews, nerves are rife. One targeted question from the selection panel about your past experience, interests or hobbies can easily send you down the path of no return. In this situation, you may unknowingly reveal confidential details about your business venture to impress a potential employer, to demonstrate your ambition and creative vision or to highlight your overall employability.
If someone from your interview panel subsequently makes unauthorised use of this information without your permission:
Action may be taken for breach of confidentiality in these circumstances.
It is always best if the obligation of confidentiality is documented by way of written agreement, as this will assist a court to determine what the confidential information actually comprises of and for what purpose the confidential information was disclosed” says Jamie White.
With Experience Comes Wisdom: What Strategies Are Available To You To Protect Your Business Ideas In The Future?
In the business and startup world, trusting others with information about your business ideas, business model, marketing strategy or business plans, can be a poisoned chalice.
Always be conscious that your competitors may be listening.
If you must share your business ideas with a third party, wherever possible, use a confidentiality agreement (also known as a non-disclosure agreement). This legal contract protects your information and acts as a deterrent against someone disclosing, or acting on, your information without your permission.
In the eyes of the law, confidentiality agreements put matters beyond doubt as to who has breached a legal obligation. This makes it much easier for a court to determine what has been agreed, to what extent someone has breached that agreement and, therefore, what remedies you are entitled to.
O-Rule: Only reveal sensitive information to others, including friends, family and those working within your organisation, on a need to know basis.
What Outcome Or Remedy Can You Expect?
Without written evidence of a breach of confidence, it is difficult to prove that someone has breached an obligation to you.
It would be up to a court to determine whether there has been a breach of an obligation to maintain confidence in relation to your business idea, and whether you should be awarded a remedy. Without documentation to support your claims, litigation can be drawn out, costly and rapidly devolve into a ‘he said she said’ scenario.
If you lose your case, you are responsible not only for paying your own legal fees, but also the legal fees of the person you are bringing an action against.
For small business owners, this option is often unfeasible.
Prepare your business strategy early to avoid nasty surprises.
Always ensure your business ideas are protected with a confidentiality agreement. This way, if someone breaches an obligation to maintain that confidence, you will be in a sound position to prove this in a clearly documented agreement.
Jamie White says:
“In the event that a person threatens or actually breaches an obligation to maintain confidence with respect to a new business idea (or anything else), then remedies may include injunctions and damages.”
Conclusion
While people are biologically pre-programmed to share new ideas and information, we are also predisposed towards opportunistic behaviour, particularly in the business world.
In the right circumstances, everyone (even lawyers) can be drawn in and manipulated into making a decision, or taking action, that is against their better judgement. When it comes to sharing a good idea with others, the best defence is a good offence.
Always exercise hyper-vigilance in your dealings with others and, wherever possible, use confidentiality agreements when you must share sensitive information.
Work smart and take the fight to your competitors the right way by preventing a potential legal conflict before it arises.
Have you had a similar experience in the startup or business world? What did you do about it? Let us know in the comments section below!
Further Information
To get in touch with a legal professional specialising in intellectual property, social media law or technology law, contact:
- Pod Legal (VIC, QLD)
- Phone: 1800 POD LEGAL (1800 763 534)
For more information about patents, contact:
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