What To Do When Someone Steals Your Startup’s Idea
Ideas nowadays are dime a dozen, but yet entrepreneurs still worry about people stealing their idea, hence all the NDA forms that entrepreneurs always want developers to sign. Usually if you are in the early idea phrase, you should not need to worry about someone stealing your idea. You should actually go out and validate your idea first and recruit the correct people to take your idea live. There are however, some cases where the a team is already establish, a prototype is out, and they’re ready for launch, but the idea ends up getting stolen. What can you do?
Get Back To Work
What I mean by this is that unless the idea is exactly identical to your idea, it is going to be a waste of time for you to actually try and stop it. While you are using your effort and time to file lawsuits and send out letters, the other company is spending time building traction and creating a better product than you. I know it’s hard to see an idea get stolen, but think of them as a competitor. In this internet’s age your startup’s idea might not be the most unique idea out there.
Your startup’s idea might already have a copycat or sometime you might have already copied someone else startup’s idea without knowing. Honestly, if you look back in the past a lot of the successful tech enterprises are spin offs of other not as successful startups. For example, there was Friendster before Facebook, but Facebook made it better. Even if they can steal your startup’s idea, can they steal your team? Can they steal your knowledge? Can they steal your connection and pitch deck? Probably not.
Typically a copycat doesn’t copy the exact product and it would make no sense that they do so. If your startup has grown enough and you are able to create a powerful brand over it, then there is no reason for someone to use a copycat version of the product over your startup’s product.
On the other hand, if your startup’s idea isn’t complete then chances are that the copycat have a different vision and end goal than you do. Most people only copy ideas when they know it is going to be successful. For example, when Fiverr was first released, nobody wanted to copy it. A lot of people criticize how it won’t grow and won’t make money, but later on when Fiverr started building a mass amount of traffic, clones were starting to appear everywhere. Until today, no clone out there came close to the original Fiverr. Fiverr ignores all the copycats as well because they don’t want to waste time dealing with them. In other words, just stop wasting time on worrying about your idea getting stolen and focus on how to make it better and more known than your competitors.
Related Read: The Crappiest Idea Could Be Funded With A Good Team
Cease And Desist
I’m not a lawyer nor do I know much about law, but prior to writing this I did seek advise from a few of my lawyer friends. They recommended the same thing, which is to focus more on your product in the early stages. They also mentioned that the most typical way of stopping the copycat is by filing a cease and desist.
A cease and desist does not mean going into a lawsuit with them. This is a warning letter that you could send them to notify them that you are aware that they are copying your product and you will take legal action if necessary. The whole process can take a long time and does not always work in your favor.
You could be very behind if you stop all your work just to deal with one copycat. Sometime it might work in your favor, but think about all the bad possibilities that can occur. For example, what if this turns into a bad public image or a bad press report like the Funnyjunk case. Imagine all the money and time that it will cost you if you take this to court. What if you do not win in court, imagine all the loss that you have to take.
If you do plan on sending a cease and desist, here is a sample letter from Thompson Hall so that you can have a clear view of how it will look.
Dear Mr. Doe:
This law firm represents [CLIENT NAME]. If you are represented by legal counsel, please direct this letter to your attorney immediately and have your attorney notify us of such representation.
We are writing to notify you that your unlawful copying of [CLIENT’S COPYRIGHTED WORK] infringes upon our client’s exclusive copyrights. Accordingly, you are hereby directed to
CEASE AND DESIST ALL COPYRIGHT INFRINGEMENT.
[CLIENT NAME] is the owner of a copyright in various aspects of [CLIENT’S COPYRIGHTED WORK]. Under United States copyright law, [CLIENT NAME]’s copyrights have been in effect since the date that [CLIENT’S COPYRIGHTED WORK] was created. All copyrightable aspects of [CLIENT’S COPYRIGHTED WORK] are copyrighted under United States copyright law.
It has come to our attention that you have been copying [CLIENT’S COPYRIGHTED WORK]. We have copies of your unlawful copies to preserve as evidence. Your actions constitute copyright infringement in violation of United States copyright laws. Under 17 U.S.C. 504, the consequences of copyright infringement include statutory damages of between $750 and $30,000 per work, at the discretion of the court, and damages of up to $150,000 per work for willful infringement. If you continue to engage in copyright infringement after receiving this letter, your actions will be evidence of “willful infringement.”
We demand that you immediately (A) cease and desist your unlawful copying of [CLIENT’S COPYRIGHTED WORK] and (B) provide us with prompt written assurance within ten (10) days that you will cease and desist from further infringement of [CLIENT]’s copyrighted works.
If you do not comply with this cease and desist demand within this time period, [CLIENT] is entitled to use your failure to comply as evidence of “willful infringement” and seek monetary damages and equitable relief for your copyright infringement. In the event you fail to meet this demand, please be advised that [CLIENT] has asked us to communicate to you that it will contemplate pursuing all available legal remedies, including seeking monetary damages, injunctive relief, and an order that you pay court costs and attorney’s fees. Your liability and exposure under such legal action could be considerable.
Before taking these steps, however, my client wished to give you one opportunity to discontinue your illegal conduct by complying with this demand within ten (10) days. Accordingly, please sign and return the attached Agreement within ten (10) days to
[FIRM CITY, STATE, ZIP]
Fax: [FIRM FAX NUMBER]
If you or your attorney have any questions, please contact me directly.
Ways To Prevent Your Startup’s Idea From Getting Stolen
Instead of getting frustrated when you realized that your startup’s idea has been stolen, have you thought about what actions you could have taken to prevent this from happening? It seems that a lot of entrepreneurs are just paranoid that their startup’s idea will get stolen, but they don’t take the steps to prevent it. There is no guarantee way of protecting it, but if your idea is so good and you have a solid team then you should be able to prevent it and you should also be able to create something that in not clone-able. Think about Dropbox, up until now there still isn’t a solid clone of Dropbox. Why? Is it because their idea is fully protected? No, it’s because the team was able to create something that is extremely hard for someone to clone. The Dropbox team had a simple idea, easy cloud storage, and yet nobody can do better.
Here are some things you can do to prevent your idea from being stolen:
- Make a great product that people can’t copy
- Look into patenting your software (not as easy as it sounds, plus there is a lot of loopholes, but if possible this can help especially when sending out a cease and desist letter.)
- NDA agreements (developers don’t like this, but it helps.)
- File For A Custom Trademark
- Use Watermarks in your product’s pictures
- Generate solid brand exposure. If you have a solid brand, then your customers will never use another product over yours
- Keep records of all your work incase of a lawsuit to prove that you worked on this idea before your copycats.
- Build good relationship with top advisors and players in your field. For example if your advisor is a “big-name”, you could have them make a public post about the copycat.
There are a lot more ways/steps that you can take to prevent your idea from being stolen, but you should never worry about that. Back to my very first point, just keep working and do better than your competitors. There are always going to be competitors and if you are confident in your skills, then you should never have to worry about your startup’s idea getting stolen in the first place.