You and your team have developed a small clip-on lighting device that’s perfect for a flexible event photographer’s needs, and now you’re looking to get it out into the market. You don’t have the resources to manufacture or sell it yourself, so you’re looking to license your design to a company that can help you bring your product to life - but how do you protect your idea from being stolen by the very company with which you’ve partnered? You want to make sure you and your team get the credit - and the cash - you’ve earned.
HOW DO YOU KEEP SOMEONE ELSE FROM TAKING IT
There are several ways to safeguard your ideas and designs - your intellectual property - and the first and most important is a patent. If your product is eligible to receive a patent, it’s worth the money to acquire one, but be aware that not every product can be patented. In order to receive a patent, your lighting device must be 1) patentable subject matter, 2) new, 3) useful, and 4) non-obvious.
In general, almost everything that can be invented is “patentable subject matter,” which is defined as devices, processes, or compositions of matter - the only inventions that really fall outside this category are totally abstract processes, such as software ideas that haven’t been reduced to a workable written form. Similarly, it doesn’t take much for a device to be “useful” - anything that has any sort of use, even a frivolous or purely entertaining use, is considered useful. Much more difficult are requirements two and three: that the device be new and non-obvious. There are thousands upon thousands of patented devices, and for your device to be “new,” it must be different from all of them. And furthermore, the creative leap from all the lighting devices that came before you to your lighting device must be one that was “non-obvious” - not something that anybody would see as an easy and natural progression of the technology.
Proving that your device is patentable can be a long and expensive process, and you often don’t receive a patent until years after you’ve applied. However, if you do manage to get a patent, then you have powerful legal protections for your idea: nobody can make or sell a product that matches your patent’s description for any reason, anywhere in the United States for the duration of the patent, even if they arrived at the idea completely independently. If they do, you are eligible for hefty payouts. What’s more, a patent will not only protect your product from any companies you license to manufacture that product, it will make companies more likely to want to license your product. Manufacturers are always interested in stable products with a low risk of competition, and nothing makes a product quite as safe from competition as the limited monopoly that a patent grants.
WHEN A PATENT WON’T WORK - WHAT ELSE?
Unfortunately, not every product can be patented - most will fail to meet the “new” and “non-obvious” requirements - but there are other protections that can be just as strong, and one of the strongest is simply a well-maintained brand identity, otherwise known as a trademark. Perhaps your lighting device doesn’t contain any new technology, but it is a quality, well-made product. In this case, you could simply lean on your brand recognition in the market, taking the time to register your trademarks while building customer goodwill around the strength of a truly high quality device. Trademarking your brand and guarding your identity won’t prevent an unscrupulous manufacturer from reproducing your product, but it will prevent others from claiming to be you or producing a product that is confusingly similar to your own.
Another way to protect your idea is to keep it secret. United States law recognizes that when a company puts effort into keeping a process or design secret, and derives an economic benefit from that secrecy - because other companies can’t reproduce it and therefore can’t compete - then that secret is a protectable legal asset called a trade secret. Stealing a trade secret - also called misappropriation - can lead to hefty payouts.
Unfortunately, not everything can be covered by trade secret law. Physical devices, such as your lighting device, are usually a bad match for trade secret coverage because they can be disassembled and reverse-engineered by consumers and competitors. If, however, you are trying to protect a process - such as software - or if there is some part of the manufacture of your device that truly can’t be reverse engineered, then all you have to do to cover it in the cloak of trade secrecy is to actively work to keep it a secret. If you are licensing your idea to a manufacturer, that means a non-disclosure agreement. An NDA means that your manufacturer won’t be able to tell anyone about the processes you deem secret. Of course there will be leaks, but the fact that you have an agreement at all is evidence that you’re taking steps to keep your process secret, which is all that a trade secret requires.
NDA AND NON-COMPETE
The last useful tool for protecting your product from manufacturers you license to is a non-compete agreement. A non-compete is exactly what it sounds like - it’s an agreement you sign with your manufacturer that they won’t create a product that competes with yours. There are limits to non-competes - courts will only allow them for a limited time after the termination of a working business arrangement and only within a limited geographic area - but they can be a powerful and flexible way to keep your business partners from stabbing you in the back with competitive products.
No matter how you choose to protect your products or what methods best fit your situation, however, it is a good idea to talk to a lawyer and do it sooner rather than later. Patents are issued on a first-come-first-served basis, and it is very easy to lose your patent to someone else who came up with the same idea after you, but registered before you. Similarly, it’s easy to lose a trademark to a business who happened to file before you, even if they only minimally use the brand name you both want. An intellectual property and business attorney will be able to help you sort out which protections will work and which will be your best bet for protecting your product.