When forming an LLC, it is important for entrepreneurs to protect their ideas from copycats. From well-known startups such as the Snuggie and the Slanket, which feature similar designs, to competition between large corporations and small businesses, ideas often overlap or are deliberately copied.
Experts agree that after developing a new product, the first step should be obtaining a patent.
“If you have a great idea, you’ve got to protect it,” David Kappos, director of the United States Patent and Trademark Office, told USA Today. “If you don’t protect (your ideas), it’s very easy for others to legitimately take them.”
It costs about $1,000 to file a patent, but small businesses are eligible for a 50 percent discount. Kappos suggests hiring legal help with filing, which is more expensive. He estimates that it would cost an extra $5,000 to $10,000. However, it is always best to get professional support when possible, whether it is to help with filing a patent or filing an LLC.
In a Wall Street Journal guide on idea protection, it is also advised that entrepreneurs ask those they share their ideas with to sign non-disclosure agreements. This will provide security when they pitch their ideas to other companies. As as a further preventative measure, entrepreneurs can seek referrals before sharing ideas.
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