As a small producer, designer or manufacturer, you might want to approach a larger company with a pitch for a new product. But what happens if your ideas aren’t protected? Grid Law founder David Walker responds to a reader who fears their intellectual property might have unknowingly been handed over.
Please could you help me with some advice.
I have contacted two companies about ideas for a new product that would work well alongside their existing range.
The first company asked what the idea was so I explained. They replied asking me to go into more details and after providing them with more information I heard nothing further from them.
The second company again asked what my idea was. They responded quickly asking for more information and then replied saying they were already working on the same idea. I suggested I could assist with this but again I’ve heard nothing more from them.
I don’t have any signed agreements with either company, I just trusted them when I shared my idea.
What should I do next?
Thank you for your question.
At the moment it doesn’t appear that either company has done anything wrong. It will only be when (if) they launch their product we will be able to see if they have incorporated any of your ideas into it.
If, after looking carefully at their new products, you think they have, we can look at this again and see what your options are. We will be looking to see if they have copied any of your intellectual property rights or confidential information.
From a legal perspective it’s very difficult to protect ideas. Your only real option is to keep them confidential. This means you would normally enter into a non-disclosure agreement (NDA) prior to disclosing details of your idea.
I note that you don’t have any agreements with either company and in any event, large companies will often refuse to sign an NDA. This isn’t them being difficult, it’s a necessity for them to protect their business. If they sign an NDA and they’re already working on a new product that’s similar to yours, you could potentially stop them from launching their product and all their investment into it would be wasted.
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Depending on what your product is, there may be various forms of intellectual property you can obtain to protect it.
For example, you may be able to protect how it works with a patent or how it looks with a registered design. If the product isn’t fully developed yet, you may just have copyright protection in your plans or drawings of it.
A word of warning regarding patent protection
You can only obtain a patent if the invention is new and hasn’t been disclosed publicly. Depending on what information has been shared with the companies this option may already be lost.
When you have a new idea for a product there is likely to be parts of it that are confidential and could be protected by intellectual property rights and other parts that can’t.
So, in the future, if you are pitching a new idea to a company you should start by sharing a general concept with them to gauge their interest. At this level you’re unlikely to be sharing any confidential information and the company will be able to assess if they’re already working on something similar.
If they like your initial idea you can share a little more information, but be careful about how much you share. Once confidentiality has been lost, it’s lost forever. If you’re at the stage of needing to share confidential information you can ask them to sign a confidentiality agreement before going any further.
“Once confidentiality has been lost, it’s lost forever.”
If the company likes your idea and wants to progress with it, you will need to think about either selling or licensing the idea to them. There are pros and cons of each method so it’s a matter of personal choice which you would prefer.
Alternatively, if you really believe in your idea but don’t get any interest from the companies you pitch it to, think about setting up your own business and selling the product yourself. Once you have proved the product is popular you may find renewed interest from a larger business willing to take it on.
I’ve written a few other articles that may help you with this. I would recommend reading the following as a starting point:
In the meantime, please keep all of your notes and records about what information you have shared with the companies and when you shared it in case we need them as evidence later.
If you have any further questions about this, please feel free to email me again.
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