Take smart actions now to protect the intellectual property of your small business

Protecting business ideas is very important for entrepreneurs and small business. It is important to start guarding these business ideas during the start-up phase. The primary methods available to small businesses to protect their business ideas are non-disclosure agreements, trademarks, common sense procedures around trade secrets, employment agreements and, increasingly, patents. However, in the business world, good ideas are copied all of the time and relying solely on legal protection will probably be frustrating to a small business owner or entrepreneur.

Important Tip Most important, work to keep improving your business, hire great people and provide exceptional customer service - these business practices tend to succeed even if people are trying to copy what you do.

Non-Disclosure or confidentiality agreements

Non-disclosure agreements or confidentiality agreements are primarily used with potential business partners or people funding your business. When you start discussing your business plan with others, for whatever reason, it is smart to have people sign a non-disclosure agreement prior to the discussion. You should expect a lot of resistance to this. You should also include confidentiality language and non-disclosure language in the small business' business plan.


Trademarks are available to protect trade names and business names. A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others. A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product.

Common sense protection of trade secrets

Common sense procedures are also important to protect business ideas and trade secrets. Keep as many people as possible from knowing your trade secrets. For example, to protect a recipe, don't let people know what's in it — or combine some ingredients so people don't know everything they are using. With a business process, don't let people know how you do it — or all of it.

Employee agreements

All employees should sign agreements requiring them to keep business information confidential and to not use such information in the future. In addition, non-competition agreements may be useful.

Patents to protect business methods

Finally, patents are becoming increasingly available to protect small business methods. A patent is defined as the grant of a property right to the inventor, issued by the United States Patent and Trademark Office (USPTO). Generally, the term of a new patent is 20 years from the date on which the application for the patent was filed in the United States or, in special cases, from the date an earlier related application was filed, subject to the payment of maintenance fees. U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions. Under certain circumstances, patent term extensions or adjustments may be available.

For a long time, patents for business methods or business ideas were extremely rare. Increasingly, the USPTO is granting patents fro business methods, particularly around the internet or other high-tech applications. For example, the following patents have been granted:

  • Open Market's patents for electronic trading (USP 5,724,424; USP5.715.314; and USP 5,708,780)
  • Netcentive's bonus gifts marketing (USP 5,774,870)
  • Cyber Gold's Attention Brokerage patent (USP 5,794,210)
  • Price Line's patent (USP 5,794,207)
  • Double Click's web advertising method patent (USP 5,948,061)

  • Amazon.Com's one click patent (USP 5,960,411)
  • WWW scheduling control patent (USP 5,960,406)

If the small business has a particularly useful, novel and non-obvious business method, patent protection should be considered.

Additional Information
Important Tip: 
Most important, work to keep improving your business, hire great people and provide exceptional customer service - these business practices tend to succeed even if people are trying to copy what you do.
Marketing copy: 
Protecting your Business Model