—————-
Please read this article in the context of understanding that most business ideas never get off the ground at all; and of those that DO get off the ground, most fail because of poor execution; and of those that ARE well executed, most fail because they don’t properly address/create a market need or a want.
 
Oxford Launch Weekend aims to foster a spirit of openness, and thus get more businesses off the ground; and then to increase their odds of success by creating and mentoring teams that can execute effectively, and by insisting on market research.
 
Confidentiality is important and you need to understand the issues, but it is rare for a business to succeed in all other respects, but fail because of confidentiality issues.
—————-

 

Hello, all!

I hope you’re looking forward to the Oxford Launch weekend as much as I am.

Some participants have already raised an interesting question in relation to confidentiality and intellectual property at the event, i.e.:

“What protections am I losing if I share my brilliant start-up idea with a room full of people?”

Well, hypothetical participant, let me give you the skinny.

Ideas: The law of England and Wales does not offer much protection to “ideas” as such. Whether an idea is protected (and how) will depend on whether it is covered by confidentiality and whether it comes within any recognised categories of intellectual property, primarily patents. For instance, if an idea is an “invention” then it may be patentable – and one extremely important thing to remember is that an invention is only patentable as long as it remains secret, so if you have an invention which you’re looking to bring to market and which is not already the subject of a patent application or patent, then this event is not the best place to discuss it. Of course, not all ideas are inventions.

Let’s look at these in turn (and please note that this is high-level commentary – your precise position will be determined by the facts and if you have any concerns you may wish to take legal advice).:

Confidential Information: The law will protect “confidential information”, which is information not already known to the public and which is disclosed under obligations of confidence.

Information “not known to the public”, means that the information must be secret (or only known to those to whom it has been disclosed under obligations of confidence) and usually also not merely comprised of information in the public domain i.e. it has taken some material effort to put together.

For instance:

  • If your bright idea is “to sell artisan honey via a dedicated online shop”, then it’s probably not protected as confidential information as it combines two pretty well-known elements (“honey” and “e-commerce”). The fact that you are planning to put this idea into action may be confidential (insofar as it’s a secret – maybe you don’t want your employer to know about your prospective career change!) but the idea itself is unprotected;
  • If your bright idea is “to sell artisan honey which I will source from a catalogue of beekeepers I have assembled over painstaking years of eating more honey than Winnie the Pooh” then we’ve got something more capable of protection. The hotlist of beekeepers is a valuable business resource which is not known to the public.

By information “disclosed under obligations of confidence” we mean that the idea has only been shared in circumstances where:

  • there is an express obligation of confidence (for instance, one set out in a non-disclosure agreement); or
  • there is an implied obligation of confidence (for instance, if the disclosure is between employer and employee). I don’t recommend relying on implied obligations of confidence as by their nature they leave room for argument over whether or not they should be implied in the specific circumstance of the relevant disclosure.

It’s important to understand that confidentiality is an obligation owed to you by a person to whom the information is disclosed. It gives you the right to sue that person if he or she discloses or misuses your confidential information, so you can claim damages in recompense or seek an injunction stopping them from making any further disclosure. Confidentiality is not a “monopoly right” – it provides you with no right of action against another person who has had with the same idea, or who has acquired the information (or come up with the idea) independently. And, once any confidential information has hit the public domain all bets are off. Finally, you can’t make an obvious and non-confidential idea (“I’m thinking backgammon – only online!”) confidential just by putting “confidential” on your pitch document.

So, let’s say you have an idea which is protected by confidentiality. Now it’s Launch Weekend and it’s time to share your idea – where does this leave you? Well, as soon as you share confidential information with a room full of people, it will lose any quality of confidence and cease to be protected (unless it is protected as an intellectual property right below). What you need to ask yourself is:

  • can you usefully share and develop your idea without disclosing confidential information (e.g. “I propose to sell artisan honey using a list of carefully-sourced beekeepers, the details of whom I shall keep to myself for now”)? and
  • if your idea ceases to be confidential, is this really something of which to be afraid?

For example, let’s say your idea is to launch an App which allows retailers to offer in-game items such as gifts and power-ups to mobile gamers as promotional activity(*). Good idea, right? Well, part of bringing that good idea to the market is that it will cease to be confidential the second you market the App (or even begin promoting the idea in public to seek funding). However, while at that stage you will not have the protection of confidentiality, you will have the competitive advantage of being the first person to take that idea and run with it.

So how does this relate to the Oxford Launch Weekend? Well, the whole point of the event is to float, refine and validate your idea in a room full of enthusiastic collaborators, and establish you as the best person to get your idea to market. What you will have to decide is how much to disclose, and whether the competitive advantage derived from the Launch Weekend process is worth the possible loss of confidentiality.

This isn’t a decision that anyone else can make for you, of course, and you should always bear in mind that your idea may not be one to which confidentiality is relevant in any event (for instance, if I were somewhat modestly to pitch a new IP consultancy business based on my huge reams of expertise, there wouldn’t really be anything confidential in that idea).

You should not, however, disclose any patentable inventions at the event, as doing so could jeopardise their patentability. Grab your helmet, we’re about to discuss patents.

Patents and Inventions: The patent system is intended to confer a time-limited monopoly on inventors, so that for the duration of the patent (20 years in the UK) only they are allowed to exploit the relevant invention. This incentivises and rewards technological innovation. To obtain a patent, the inventor needs to file a patent application in which the details of the invention are disclosed. The application will eventually be published and accessible to the world at large, which means that the patent system also ensures that the details of the invention are made available to the public, and can be freely used by anyone after the patent has expired.

In order to be capable of patent protection an invention must (among other things) be “new”, and not form part of the existing state of the art or improve on the existing state of the art in an obvious way. This can often be a difficult thing to determine, and is not a subject we’re going to expand on here (although I would be happy to point you to some friendly lawyers and/or patent attorneys if you’re interested).

The relevance is that the “state of the art” is anything which is known or made available to the public other than under obligations of confidentiality (whether a big section of the public or a small group of people). So if as an inventor you announce the details of your invention in a public forum like the Oxford Launch Weekend, then the invention may form part of the state of the art and if so will no longer be patentable, ever. It’s a question of degree whether or not a disclosure is “enabling” so as to have introduced the invention to the state of the art. Let’s say your invention is a new combination of chemicals which, when combined in the correct proportions, have the wonderful property of forming a super-strong adhesive. Saying “I have a super-strong adhesive which I propose to market to the construction industry” is not an enabling disclosure, but saying “I have super-strong adhesive comprising a mixture of the following polymers (and honey)” may well be enabling. Overall, if your “big idea” is an invention, you will have to be extremely careful about the extent to which you discuss it at the event.

  • Last question, then – what’s an invention? It may be easier to discuss some items which are not patentable inventions (in the UK, at least):Surgical, therapeutic and diagnostic techniques (the rationale being that nobody should have a monopoly on something whose dissemination benefits mankind (or animal-kind));
  • Discoveries, scientific theories and mathematical methods;
  • Aesthetic creations (these are protected by copyright, trade marks or registered designs);
  • Schemes, rules and methods for performing acts, playing games or doing business (this is really where the distinction between “ideas” and “inventions” lies, and stops people from patenting ideas such as business models, or concepts such as “word processing”, or “using a touchscreen slingshot to fling enraged avian projectiles”).

Computer programs are a complicated area. In Europe, they are generally only patentable if they embody an invention which has a technical effect (for instance, image enhancement could be a technical effect). However, the U.S. takes a more liberal approach and allows for the patenting of “business methods” (such as, famously, Amazon’s “One-Click” purchasing software).

If your idea is not an invention, then of course patentability is not a concern to you.

Other IP Rights: There will of course be other intellectual property rights which are relevant to your proposed start-up, but outside the scope of this blog. I will be available at the event as a mentor, so feel free to come up and ask questions at any time. I look forward to seeing you there!

Max

(*)This brilliant idea belongs to GiftGaming, who recently sought crowdsourced funding through Seedrs – see www.giftgaming.com and seedrs.com for details. I have no association with GiftGaming and am merely using them as an example!

Disclaimer: the above is high-level, generic commentary and does not comprise legal advice on which you are intended to rely. If you have any concerns about your position consider taking legal advice.


About the Author

Max Windich is a solicitor at Penningtons Manches LLP’s Oxford office, specialising in intellectual property and IT law. He advises on a wide range of commercial contracts and IP and regulatory issues, with a focus in the IT and digital, media and retail sectors. He has particular experience in advising web-based start-ups, software developers and technology companies on their commercial and contractual relationships.

Email: max.windich@penningtons.co.uk