3 Ways Entrepreneurs Can Protect Intellectual Property

Intellectual Property
If you are a fledgling entrepreneur with a big idea you strongly believe can soon be turned into a lucrative business opportunity, then learn about how best you can protect that idea.

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The September 2009 issue of the Entrepreneurial Business Law Journal contains a paper entitled “Entrepreneurial Options for Protecting Intellectual Property.” The paper, which was written by Dr. Stephen Schanz of North Carolina State University, flawlessly details three ways in which entrepreneurs can safeguard their big ideas, examines the pros and cons for each intellectual-property protection option, and offers recommendations on when to use them. Here is an overview of the findings of the study, as well as pertinent details you need to know about patents, trade secrets, and copyrights.


Patents generally apply to devices and inventions. When you get approved for a utility patent, your idea is legally protected for a twenty-year period from the day you filed for a patent. Maintenance fees apply throughout the duration of your patent period. After twenty years, your idea is then relegated to the public domain.

If your patent covers enhancements on an existing device or invention whose patent protection is still enforced, you can only use your enhanced version of the already patented device or invention if the patent holder gives you permission to do so. And a patent holder can always refuse to grant permission.

A caveat: when you talk about your idea with other people who you have not legally bonded with nondisclosure agreements, you practically ushered your idea into the public domain, thus disqualifying it for patenting.

Instead of applying for a patent, you can choose to protect your intellectual property either through defensive publication or by making it a trade secret. With defensive publication, you can detail your big idea publicly to establish yourself as its original creator. And since a detailed description of the idea is already in the public domain, nobody else can patent it. Trade secrets, on the other hand, simply keep your intellectual property away from third parties.

Trade Secret

Like patents, trade secrets are also used for protecting intellectual property associated with devices and inventions. The difference is that the protection happens internally and in perpetuity. Trade secrets are safeguarded by employment law, non-compete clauses, and nondisclosure agreements. You can also institute technological safety measures and restrict knowledge of your trade secret to a few trusted employees. The idea never slips in to the public domain, but if someone can work out your trade secret, then that person or corporate entity can legally sell it.

Although you don’t have to file paperwork or pay fees to legislative agencies, keeping your intellectual property safe by making it a trade secret makes it susceptible to reverse engineering, which is a legally sanctioned way of broaching a competitor’s trade secret. You also have to contend with employee poaching. However, if your trade secret is acquired through industrial espionage, you can have legal recourse.


A copyright is used to protect unique and distinctive expressions. Normally associated with art and music, a copyright can be extended to protect the intellectual property of certain elements found in commercial products. Examples of such elements where copyrights apply are the images and sounds in a video game.

Normally effective for a certain period of time, a copyright gives exclusive use and distribution rights to the copyright holder, who may be the creator of the copyrighted work or the employer of the creator, as in the case of a work-for-hire arrangement.

Note that graphic items or sculptural pieces that have utilitarian qualities can only be copyrighted if their aesthetic aspects are independent of their usable features. In addition, the copyright protects the creator’s original expression of the idea but not the actual idea. Replication of your idea may also not be legally hindered by copyrighting it. There are cases where the United States fair-use doctrine applies, allowing the replication and distribution of copyrighted material without the copyright holder’s permission or without paying fees to the copyright holder.

All in all, your choice of intellectual-property protection option depends on the nature of your big idea, whose significance and profitability can change over time. The options can even be combined. For instance, a portion of your lucrative idea may be highly patentable while the rest of it is best kept as a trade secret. So, weigh the pros and cons of each option to arrive at an informed decision.

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