Posted on September 22, 2015
Making Money from Your Great Ideas – Part 1
*Note: this is part one of a three part blog. Check back or follow us for the next two parts.
“How can I make money from this great idea I have for a business/product/service/movie?”
People often post questions like that on Q&A boards such as Quora.
Unfortunately, there isn’t really much of a market for “bare” ideas – especially since they’re as common as dirt.
As Atari founder Nolan Bushnell once said,
Everyone who has ever taken a shower has had an idea. It’s the person who gets out of the shower, dries off, and does something about it that makes a difference.
Or as entrepreneur and angel investor Chris Schultz put it in the New York Times,
Everyone thinks their idea is extremely unique, but the idea is really 1 percent of the value. The value is in the execution.
As we discussed in this blog,
Many people make others sign non-disclosure agreements (NDAs) before they reveal their business ideas to them. They assume that an NDA will prevent the other party from using or revealing their ideas.
But NDAs aren’t like the magical protective spells some people seem to think they are.
A better way to protect an idea is by turning it into intellectual property.
When it comes to protecting ideas, the following forms of intellectual property (IP) are most relevant:
- Trade Secrets
Here’s a VERY brief primer.
Patents protect inventions. An invention can be a better mousetrap or even a better mouse.
More generally, a patent protects “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.”
Patents can also protect product designs – like the shape of a Lego block.
Copyrights protect works of authorship, “including literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished.”
For example, copyright law protects software code. But copyright doesn’t protect the functionality of the software – for that you need a patent. So a competitor wouldn’t be violating your copyright if they can write different code that accomplishes the same thing.
Trade Secret Law protects “information, including a formula, pattern, compilation, program, device, method, technique, or process.”
As we discussed in this blog, trade secret law can protect “empirical data” like the formula for your secret sauce, but it won’t necessarily protect naked “ideas.”
So what’s the best way to make money from your ideas? Check back or follow us and find out in parts 2 and 3.
The information and materials in this blog are provided for general informational purposes only and are not intended to be legal advice.