Last week was interesting. I met a person trying to sell something he did not own. Rare breed? No, the funny part of this story is that I meet these people all the time. They are good people who simply don’t understand the ownership. It sounds strange but it is a common mistake. And it causes inventors and investors to work under a cloud of seemingly endless strife.
Intellectual property is a strange beast but its methods of ownership are well documented. The problem understanding it is that people think they own an idea by just thinking it. They’ll say “That was my idea”, as if simply percolating a thought incarnates ownership in it. It’s not that simple. The path to acquire ownership in an idea is not complete upon the idea’s birth it is simply begun.
Before you can sell an idea you must own it. The best way to understand this is to consider a silly example coffee cart idea. And while it seems silly now, if you’re a Creative there’s a good chance you’ve tried to do this.
Bob asks you to sign his “Iron Clad Non-complete Confidentiality Agreement” and you refuse. Bob agrees to tell you his idea anyway.
Then the rest of the example goes like this. Bob has an idea to open the “Eiffel Tower Coffee Cart” at the base of the Eiffel Tower. He wants to sell you this idea for $1,000,000 and a 10% royalty (its always the magic $1,000,000 and 10%). The visions of Paris and the smell of Hazelnut Creme cloud your thinking for a second or two. Then you begin to ask Bob questions.
You: Bob, do you own rights to the name “Eiffel Tower Coffee Cart”
You: Do you have a lease for a coffee cart at the base of the Eiffel Tower?
You: Bob, have you developed a coffee cart?
You: Do you own a brand of coffee you are trying to sell me?
You: Bob, WTF!?!
Bob has as much ownership in his idea as he does in the Eiffel Tower itself. Bob is NOT Victor Lustig (The man who sold the Eiffel Tower for scrap without owning it)! Literally, Bob owns nothing. And this is usually where the investor tells Bob he has no interest and Bob begins to get paranoid about who will steal his idea.
But Bob does not know that ideas are worthless. Only property rights have value. If Bob could have answered yes to a few of the above questions your conversation may have moved ahead. The rights Bob owned could have given you an edge over competitors because rights enable you to stop others from competing against you. If Bob owned the lease for the cart at the base of the Tower Bob does not need to bother with non-compete agreements. Bob is in control. And control is a sign of ownership.
For Bob to gain ownership he invest time and money in the creation of rights. And he can do that in several ways.
TRADEMARKS: Bob could build a brand of Eiffel Coffee and acquire legal rights in it through Trademarks.
PATENTS: Bob could patent a new and unique Coffee Cart or a method for infusing Coffee with flavors in a new way, if possible.
COPYRIGHTS: Bob could create a series of TV Ads that become so viral everyone knows about “Bob’s Eiffel Tower Coffee Cart”
TRADE SECRETS: Bob could formulate a mix of coffee flavors that are so delicious people wait in-line naked in inclement weather to buy.
REAL ESTATE LAW: Bob could acquire an exclusive lease for a coffee cart at the base of the Eiffel Tower.
Any of these rights gives Bob an ability to control some aspects of his idea. And these rights can be legally transferred, i.e. SOLD. The more rights Bob acquires the easier it will be for Bob to seem credible when offering his “idea” for sale. In fact he’ll no longer be offering an “idea” for sale, he’ll be offering actual intellectual property rights for sale.
Will Bob make money? Working to gain ownership only guarantees that Bob will SPEND money. Acquiring rights is usually a costly venture without any guarantees. The trademarks and patents may be rejected, the lease may be too costly or not available and Bob’s unique coffee flavor my be not so unique. Even with the rights there is no guarantee Bob will make any money.
But without rights Bob is simply a noob trying to sell unicorns and fairy dust. I’m not going to discuss the quality of the rights in this article as that would expand the article into a book. Just understand that not all Trademarks/Patents are created equal. And realize that you must own things before you can sell them.