BabeofBusiness.com

I recently received an e-mail from a young entrepreneur who was concerned that he had given too much information to potential investors – investors who had not returned his phone calls or e-mail messages. His fear was that they were taking his idea and running with it. Sadly this can and does happen. Proof is in the upcoming movie Flash of Genius, which tells the tale of entrepreneur and inventor Robert Kearns. In a basement workroom, Kearns created the design for the intermittent windshield wiper – an invention that received countless patents. Once perfected, he took his gadget to Ford Motor Company in hopes of entering into a licensing agreement with the multi-national organization. An agreement was never reached primarily because Kearns wanted to form an independent company to manufacture the wipers – something Ford wouldn’t hear of. Not long after, Ford began selling cars with intermittent wiper systems and competitors would soon follow suit. Kearns sued Ford, along with numerous other auto manufacturers, for patent infringement. Although many would be tossed out of court, he won judgments totaling more than $30 million against Ford and Chrysler. The bulk of the money simply paid off the incredible legal fees – but monetary retribution was not the foremost reason that Kearns sued. He would stand by his philosophy until the day he died – that it wasn’t about money; it was about principle. He wanted the corporations – particularly Ford – to admit that they had stolen his idea. This was a confession he would never receive.

So the moral of the story is you need to do everything you can to protect your assets. This includes entering into confidentiality agreements and filing for patents, copyrights, trademarks and any other intellectual and physical safeguards to prevent others from simply stealing your ideas. It is important to note that venture capitalists and other investors typically refuse to sign confidentiality agreements. They often claim that they have reputations to uphold, so they will “of course” maintain confidentiality. Don’t buy it. This is your life and your livelihood at stake. Any reputable investor will understand your concerns and will sign a damn agreement. Here are a few additional guidelines for keeping your ideas safe:

• Do your homework before approaching any potential investor or partner. Check out their deals, who they’ve worked with and so on.
• Keep thorough and accurate records of all your activities. This is especially important if you have a revolutionary idea that will place you first to market. Print off existing patents and information on similar products. Be prepared to show a gap in the market.
• Don’t post your idea or business plan online and never, ever give out too much information. A synopsis or executive summary should suffice in the early stages of any deal negotiations.
• Hire a reputable attorney and have him/her draft up the necessary documents. Don’t go it alone.
• Adopt an “assume the best, but prepare for the worst” mentality so that you will be prepared to defend your idea or concept should the need arise.

And if you’re interested in seeing Flash of Genius, it comes out in select theaters October 3, 2008. Catch the trailer here.

Tags: Chrysler, confidentiality agreement, copyright infringment, Flash of Genius, Ford, protect your assets, Robert Kearns