How to protect a software idea? I recently answered a related Quora question on this one. I took parts of this post from a previous post on how to protect an idea while building a business, but this one focuses more on software, specifically. That’s where I’ve spent most of my career, and still my favorite business, by far. So here’s what you do if you have a software idea you want to pursue, while you build it. You worry that it’s easy to duplicate. You want to protect it.
10 serious suggestions:
- Shut up about it. Share this idea only with people you trust, who need to know. Only partners and potential team members at first, and only if you trust them. No bragging, no opening up to strangers. Be careful with experts too. Your software business will depend on trade secrets, not legal registrations.
- You need an attorney. Much of what you do or don’t do revolves around legal work, so you need an attorney. You can reduce the expense by reading up on issues before you meet, so you spend less time. I’m not an attorney and this answer is just my business experience, not legal advice.
- Make sure you own the code. If anybody besides you works on code, then ask your attorney how to make sure you own it. It has to do with work product. Follow your attorney’s advice on this. Don’t leave anything to chance or verbal promises. Read up on what happened between Zuckerberg and the Winklevoss twins.
- Copyright all the code. Software is hard to patent but easy to copyright. Copyright is for creative works. Copyright is relatively cheap. Know, however, that copyright doesn’t protect you against copying by reverse engineering, but at least protects you against people stealing your actual code because only the code is protected, the actual words; not the idea.
- Use non-disclosure agreements wisely. It’s okay to ask for signed non-disclosure agreements from potential co-founders and team members, or friends-and-family investors. Don’t depend on these documents, don’t make them a huge issue, but use them as much as you can; and don’t expect serious arms-length investors to sign them. They won’t and shouldn’t.
- Patents are for inventions, algorithms, and formulas, not ideas. You can’t patent an idea. If your software idea depends on an algorithm that you developed, and hasn’t been used before, then maybe you have a chance to patent that. However, very few software products include algorithms that can be patented. Your best bet for this one is a patent attorney with software experience. Don’t do a ton of work on it, or spend a lot of money, without first checking with patent experts.
- Trademarks are for commerce. Trademark your logo, your tag lines, your images, your main selling points as quotes. Trademark is relatively cheap too.
- Register your domain name and entity. Neither protects you a lot, but both are a good idea. Registering the entity protects your business name to some extent, as long as you were the first in the world. It can cost as little as $50. Registering the domain name, if you have a good one, protects you for that domain but not against copycats with similar names.
- Write your idea down and mail yourself 10 copies via registered mail. This can protect you later, with sloppy problems that come up, showing legal proof of what your idea was on what date. It’s very weak protection, but cheap, and easy to do.
- Investors come much later. Don’t talk to investors until you’re far along, with a working version you can demonstrate, milestones met, and traction. And beware of fake investors who are actually consultants looking for new clients. Always check the web footprints of investors before you share anything with them. The legitimate investors have web footprints and are easy to identify.
Some hard truths in this area:
- Copying is legal. With software, it’s legal if they don’t steal the code, but just duplicate the functionality. Since the first time my company’s software products started to make a dent in the market, we were copied. They copied our idea, our concepts, our websites, even our packaging and marketing messages. And all of that was legal (but I’m not an attorney; check with an attorney of course).
- Products get copied all the time. Try to find an important software product category that has only one entrant. Competitors will crop up if the market is interesting. No competition is sometimes worse, because it means nobody wants what you’re selling. It’s the way of the world
- Legal protection is usually pretty weak. Even patents, which are the best protection, are copied all the time, or avoided via workarounds. The real value of a patent depends a great deal on how well it was written in the first place, and then, on watching for violations with constant vigilance (but I’m not an attorney; check with an attorney of course).
- Build barriers to entry and reinforce them constantly. The only real protection is to be faster and better than competitors and keep improving so you are always ahead (but I’m not an attorney; check with an attorney of course). Make your customers love you, make them loyal. Watch for new markets and new applications in contiguous product or market areas. Make your business really hard to compete with.
I like what you said about how trademarking is absolutely essential to software launches. I need to get a software package that is more intuitive. That way workers can quickly start using the software as soon as possible.
Although all information is very helpful. There is a difference between an idea and an invention when it comes to protecting your software. While there are ways you can protect your idea from being stolen before you write your application, which we will discuss below, you will have more ability to protect your idea once it is developed.
Who is we? Where is below? Did you read the post here?
That is sound advice to get a patent on your software as soon as possible. I need to get a software package that streamlines the supply chain in our warehouse. I’ll have to get something that is user-friendly.
Thank you, Tim Berry, for putting together everything in 10 Tips on How to Protect a Software Idea. I think you have covered all the major points in this article, I will share this with my network as well.
It’s great that you talked about how it’s a good idea to consult with a patent expert before trying to patent your product on your own. In my opinion, it’s essential that any type of invention or product is protected. In that way, you’ll be sure that no one else could claim it as their own. Plus, you’ll be the only owner of the product. I think you did an excellent job explaining the importance of protecting an idea.
I’m planning to develop software that deals with time tracking, which is why I’m currently looking for an IT consulting service that may help me out. Thank you for this; I’ll make sure to hire an attorney who will be able to help me with all the documentation needed. You’re also right about the importance of informing the lawyer that the codes’ ownership must be mine.
Could you recommend a IP attorney and software engineer I could consult with?
@Tish re recommendation, no, that’s not something I’d do as a comment on a blog post. Recommendations get too old, and the blog is there forever. Sorry. Tim
Very interesting and to the point advices ! So helpful !
A promoteur friend of mine mentioned to me the following idea to ” protect my idea” , is to register my executive summary with the WGA as costs little and shows proofs of idea and date ?
Thanks Philip. And for other readers, I assume you mean by WGA the Writers Guild Association, which is about scripts and screenplays. Not my expertise, so thanks for the addition. And for the rest of us, that is not about how to protect a business idea, but rather a creative work. Tim