What Can I Do If a Company Uses My Product Idea Without Permission?

What Can I Do If a Company Uses My Product Idea Without Permission?

Question

I gave a company an idea in writing. The company told me they were not interested. Then, the company ended up making a similar product—some minor changes, same name—and selling it in many stores. What can I do?

Answer

You had a brilliant idea, tried to sell it to a company, and were quickly shown the door. It happens to many inventors and business people at some point in their careers.

But imagine how frustrated you would be if you then walked into a store and saw your idea—your product, invention, or creative name—sitting on the shelf. What can you do to get a little justice?

The answer depends on what, exactly, you presented to the company and what it promised to you.

First, it is possible that the idea was not actually protectable at all. An idea by itself is not protectable. For example, an idea to secure a car by locking a metal bar to its steering wheel is not protectable. But that same idea, when expressed in a drawing or prototype that demonstrates the unique way this invention works, may be protectable under patent laws.

Likewise, an idea to create characters that transform into superheroes is not protectable. But the same idea graphically depicted is protectable under copyright law. The name of a hypothetical company is not protectable either, unless you have either a federal trademark registration or have already used the name in commerce under your state’s applicable trademark laws.

So, if you told this prospective company about an idea without actually writing that idea down, naming it, or acquiring a patent on it (if it’s an invention), then you are likely out of luck.

There are two primary ways that you would be able to sue the company for stealing your idea. The first is if you did, in fact, reduce the idea to a protectable form before telling the company about it.

For example, imagine that you approached a comic book company with detailed drawings of a new superhero, complete with a written story. They turn you down, and a month later, you see the same drawing and story in bookstores. This would constitute copyright infringement. Similarly, if you presented an electronics company with drawings of your pending patent design on a new digital watch, and it took those without your permission to create a virtually identical device, that would be patent infringement.

Second, consider whether the company signed any sort of written nondisclosure agreement before you presented your idea. That agreement protects the disclosure of any secret ideas from unauthorized use. If you made the company sign such an agreement, you can examine it to determine your remedies. For example, the agreement might specifically state a sum of damages for infringement, or state that an infringement would result in a breach of contract litigation.

If you did not sign a nondisclosure agreement (and your idea is not protected under intellectual property laws), you will likely have a difficult time establishing "ownership." However, you still may be able to argue that a confidential agreement was implied if:

  • the company solicited the idea from you—that is, you sent the information in response to its prompting
  • you indicated that the invention was a business proposition—in other words, that you hoped for payment, or
  • the information is a trade secret—that is, has commercial value and is not known by competitors.

Although a confidential relationship can be implied, it is always more difficult to prove than showing a relationship based upon a written nondisclosure agreement.

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