Procurement · 3 December 2018

I am developing a new app – how can I ensure my idea isn’t stolen by investors?

app idea
The code in the software will automatically be protected by copyright laws so there is no need to register anything

If you’ve got an idea for a new product, the first thing you’ll want to know is how to protect your unique ideas. Grid Law founder David Walker helps a reader understand how their idea for a new app may be protected under trademark and copyright laws.

Question

Good afternoon,

A quick thank you for writing your article on protecting a new business idea – a really helpful read.

I’m emailing as I have an idea for an app which centres around convenience and transparency. When users make a purchase through the app, they will also be able donate part of the amount they pay to charity.

I have a friend who is an app developer and I’m confident he will be happy to sign a non-disclosure agreement and then assign all the rights he creates over to me.

After the app has been developed, I want to take it to market and raise sufficient investment to fund the opening of the first shop. Ideally, I’m looking for someone who will provide the working capital in exchange for shares.

I’m concerned about how the app will be protected once it has been developed and all my ideas captured within it.

Is it protected under trademark and copyright laws or would I need a patent?

What’s stopping anyone from taking the idea for themselves, creating their own version of the app and just changing the nuances of the design?

Many thanks

Answer

Thanks for your question and I’m pleased that you found the article helpful.

As explained in that article, ideas are really difficult to protect. So, before talking to potential investors, you should ask them to sign a non-disclosure agreement (NDA). The NDA will ensure that they are contractually bound to keep your ideas secret and can only use them for the purpose of considering an investment in your company so you can further develop your app.

If the investor uses your ideas for any other purpose, for example developing their own app, they will be in breach of contract and potentially you would be able to claim compensation from them.

If the investor refuses to sign the NDA, you will have to be very careful with what information you disclose to them. This is an issue I covered in more detail in a previous article: How to overcome common problems with non-disclosure agreements

Now, let’s look at the possible ways in which you could protect various elements of your app. To give yourself the maximum amount of protection, you should consider protecting as many of them as possible.

Trademarks

Trademarks protect brands. When designing the branding for your app, do so with the intention of trademarking it. This means you should make the app’s branding as distinctive as possible. Whilst you are developing your brand, carry out a trademark search to ensure there are no pre-existing brands that are likely to conflict with it.

If you register your brand as a trademark, you will have the exclusive right to use it for the products and services it’s registered for. If anyone else uses your branding (or something confusingly similar to it) for the same or similar goods or services you could take legal action against them for trademark infringement.

Copying your app and simply rebranding it would be a relatively simple exercise so trademarks alone are unlikely to give your app much protection. You must, therefore, look at protecting other elements of it too.

Catch up on some of David’s recent Business Advice articles:

Registered designs

If you create any unique icons and screen displays you may be able to protect them as registered designs. As with trademarks, you should carry out a registered design search to identify what designs other businesses have already protected.

A registered design is infringed when a new design doesn’t give an overall different impression to the registered design. Therefore, you should keep this in mind whilst designing your icons and screen displays to ensure they are sufficiently different to anything that has already been registered.

Copyright

The code in the software will automatically be protected by copyright laws so there is no need to register anything. However, copyright laws can be difficult to enforce unless you can prove your code has been copied.

When preparing your presentations to investors you may produce mock-ups of how the app will look, sample screenshots and other visual materials. These will also be automatically protected by copyright laws.

If, following a pitch to an investor, they produced their own app which looked remarkably similar to yours it may be easier to prove that they had copied these visuals than the underlying code.

It’s a good idea to ensure that all presentation materials are marked as “confidential” and add copyright notices to them. For example, “© [NAME OF COPYRIGHT OWNER] [YEAR THE MATERIAL WAS PRODUCED]”

You can read more about how and when to use the copyright “©” symbol in this article: What do the ™, ® and © symbols mean and when should you use them?

Patents

Patents protect how an invention works. For a patent to be granted, the invention must be new, there must be an inventive step and there must be a commercial application for it.

Some “inventions” are specifically excluded from being patentable and computer programmes are one of the excluded categories. However, whilst the computer programme itself may be excluded, the application of what the computer programme does may be patentable.

So, it’s possible that you could obtain patent protection for your app, depending on what it does, but successfully applying for a patent is likely to be extremely difficult. This is something you should obtain specialist advice on from a patent attorney.

As you can see, there is no “one thing” which you can do to protect your app. However, if you think about protection during the development of your app, there are plenty of possibilities available to you.

If you have any questions about any of the issues I have raised here, please feel free to email me again at editors@businessadvice.co.uk

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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