How do you convince a business partner or investor that your idea is the one they should back? First, you must be able to account for your decisions on a series of questions. To help you get started, we’ve created a five-step guide for you to follow.
There are numerous examples of companies that get the rug pulled from underneath their feet due to major infringement lawsuits. Marketing a product that infringes on others’ Intellectual Property (IP) rights can lead to a temporary sales ban and mounting legal costs or even financial compensation claims.
For that very reason, investors and business partners looking to invest in your idea expect you to have researched whether your idea needs protection or not – before you pitch it.
“You have to take a stance on IPR before you talk to an investor or others who need to be informed about the potential of your company. That’s the minimum requirement for an inventor before an investor examines the idea,” says Kristoffer Vandborg Bro, patent attorney at Plougmann Vingtoft.
In five steps, Kristoffer Vandborg Bro explains how to secure the best foundation for making your idea a success and how to determine whether IP protection is right for your firm.
1. Share your idea – but protect the rights
Anyone who has had an idea for a potential commercial success can benefit from discussing that idea with others. But tread carefully. Particularly if you discuss your idea with an inventor or investor within the same field as you.
It is perfectly normal to get inspired when discussing ideas with like-minded people, but this fact also makes it difficult in a legal sense to prove if a counterparty stole central parts of your idea.
In such cases, you can request that the counterparty sign an NDA (non-disclosure agreement) prior to the meeting. This may seem like a cumbersome process, but it is often essential to secure your rights.
If drawing up an NDA is not possible, you can instead choose to describe your invention and the problems it solves without going into details about how it solves the problems.
2. Do your market research
Contacting an investor could be a waste of time if you haven’t done your market research. Through a market analysis, you find out whether there are other players in the market with ideas similar to yours. Investors expect you to have done your research in advance and doing so is both value creating and presents you, the inventor, as being serious about the potential investment.
You can research the market from home using your own computer. The more time you spend the better a foundation you build for your idea. The most important thing is to check whether similar products are already on the market in your home market – but do not forget to check the bigger markets also. Another valuable resource is to check various patent databases such as Google Patents or worldwide.espacenet.com – free online services for searching European patents and pending patents.
3. Conduct an FTO
An FTO analysis (Freedom-to-Operate) is an in-depth examination of whether your product violates the IP rights of others. A patent attorney often carries out the FTO, as it is important to be able to understand the legal language and scope of protection in the patents.
Upon finalizing the initial FTO, it is important to continuously follow up on it to make sure that no new inventions emerge that clash with your idea. If one does emerge, it is then possible to investigate whether the invention can be adapted or rethought to avoid infringement on others’ IP rights. But making a workaround is only possible if you already know what rights are in place in your market.
4. Investigate whether you need IP protection
The previous points may have made you consider how easy it is for others to copy your product. Therefore, it is now time for you to consider whether your product needs IP protection. To determine this, ask yourself the following questions:
Is it possible to protect my product?
In Europe, there are certain rules about which products one can apply patent protection for. It is, for example, not possible to patent medical methods of treatment. If you want to patent your invention, it therefore has to be a technical solution to a technical problem.
You have to take a stance on IPR before you talk to an investor or others who need to be informed about the potential of your company. That’s the minimum requirement for an inventor before an investor examines the ideaKristoffer Vandborg Bro, Patent Attorney, Plougmann Vingtoft
Is the product sufficiently inventive?
Your product must be unique for the patent authorities to grant a patent. If, for example, your product is a combination of two existing products, it may not be patentable. This matter should be discussed in more detail with a patent attorney, who can assess both the novelty and the inventive step of the innovation.
Is my product industrially applicable?
Your invention must be able to create value before it makes sense to protect it via e.g. a patent.
If the answer to all of the above questions is yes, then you should seriously consider protecting your invention.
Another option for protecting your invention is to apply for a utility model, which either poses a considerably lower threshold for inventive step or does not pose any requirements for inventive step at all. Such an application can still give you a commercial advantage if you have a product you wish to protect.
If you have created a unique design, then you can apply for design protection.
5. Consult a patent attorney
Protecting an idea can be a relatively expensive process due to the associated fees. In fact, sitting down with a patent attorney is often the least expensive step on the journey towards IP protection. So, if your analysis led to the conclusion that your idea needs protection, it could be a good idea to reach out to one of our experts.
Just remember that IP protection is not necessarily beneficial to all companies. What is important, however, is that you consider the matter and make an informed choice as this allows you to account for your decision when asked by an investor.