Selling your “idea”

I meet with a lot of folks who have come up with a nifty idea for a product, but who, for various reasons, don’t want to be entrepreneurs. Instead, they want to sell their idea to a big company.

If you have an idea for a product that you’re going to promote or peddle to big companies, bear in mind that, absent your taking some kind of protective action in advance, there is absolutely nothing that will stop them from taking and implementing your idea all for themselves. I would call this stealing, but it is not. No one owns ideas. If you walk into my office and tell me the recipe for the secret sauce to making tons of money, there is nothing in the law that obligates me to share that money with you when I follow your recipe later.

Which is why, before you sit down with anyone, you should get them to sign a nondisclosure and noncompete and noncircumvent agreement obligating them to work with you (and pay you) if they implement your idea, right? Unfortunately, most big companies will not sign such an agreement. Most big companies fear that kind of agreement. In some cases merely asking them to sign your agreement will engender substantial disinterest in meeting with you at all. They want your idea, but they do not want to be accused of stealing it. They’d rather go without.

The solution to this catch-22 is to file some kind of patent prior to the meeting. A provisional patent is the less expensive option. Once you get the patent in place, you are enabling yourself to someday bring suit against anyone who “steals” your idea as a result of these meetings. In order to file a patent, you’ve got to be able to describe your idea in enough detail to teach someone how to make it.

If you are reacting to this news by thinking that your idea is not interesting or novel enough to warrant patent protection, then take heed: you are probably wrong, but, if you are right, then your idea probably isn’t interesting enough to peddle to big companies in the first place.

Another fun solution is to execute on your idea yourself and then sell the resulting company to the big guys. But that usually requires quitting your day job.

As always, you should consult with competent counsel to work out the best way to protect your ideas going forward.

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