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How can I protect my web site IP?

Suppose I am ready to roll out the first version of my web site to test the idea. At this moment I am not sure if it will work, so I do not want to register a company or make any official paperwork.

How can I ensure that I keep all legal rights for this web site? Suppose it will work. How can I claim it's mine? Suppose I got some traction and decided to register a company. Will I need to transfer the ownership to the new business entity? Maybe use this web site as my initial investment into the business?

23 Replies

Siarhei Harbachou
1
3
Siarhei Harbachou Entrepreneur
Looking around
You have absolutely no protection.
Every your user can see your application and make ever better.

And if you open blue ocean, you may be 100% sure, that new competitors appear who will just copy your website functionality.

The only way you can protect yourself is to acquire patent. But this assumes you have invention, and its expensive.

So, most of startupers just do everything as is. Doing just formal protection signing formal NDA with developers.
Aleksey Malyshev
1
0
Aleksey Malyshev Entrepreneur
Software Engineer at iTouch Biometrics, LLC
I was not asking about competition.
David Pariseau
2
0
David Pariseau Entrepreneur
CTO and CoFounder at Particles Plus
You can file a provisional patent, which can be quite reasonable for a small entity ($130) or the new micro-entity for individuals w/o a lot of previous patents ($65), and you have a year to convert that to a detailed patent application. The provisional is not examined so you can put in all your ideas and thoughts and possibilities and you don't need to make any claims. That way if things go well and some of the ideas pan out you can convert it to utility patent and if you want transfer ownership to some newly found company which would purchase the patent rights for some consideration (>$1). All of this presupposes that there is indeed some patentable invention that can be protected (there are quite a few types of things that this applies to, business methods being one of these), but if that's the case that's a pretty inexpensive way to get some level of protection. If you need some help with the patent application there'll be costs there, but if you do a good job of describing all of your ideas in detail in the provisional all of that content is available for the patent application in a year's time (at which point you'll know whether this idea is worth pursuing).
Aleksey Malyshev
0
0
Aleksey Malyshev Entrepreneur
Software Engineer at iTouch Biometrics, LLC
Thank you for your replies, but I think there is some misunderstanding. I was not asking about protection from competition. My question was mostly about converting a working idea into business - i.e., suppose, I come to an angel investor and say - "I have this web site, it has such number of visitors and I need investments" Are you saying they may easily copy it and make their own? Does this happen often?
matt
0
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matt Entrepreneur
Web Developer
Definitely a good question Sent from my iPhone
Siarhei Harbachou
3
0
Siarhei Harbachou Entrepreneur
Looking around
If you have traction, investors have no interest to copy your project. They invest not in idea, but in person who drives this idea.
David Pariseau
1
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David Pariseau Entrepreneur
CTO and CoFounder at Particles Plus
To be accurate you are indeed discussing protection from competition, though in the case you cite, the competition would be from a group of investors who decided to take your idea and implement it without you. Competition can also come from your supply chain or obviously from competitive firms. A defensible patent protects you from all of these.

If your idea is patentable (hard to say without knowing more about it) it adds significant value to approach potential investors with an idea that has patent protection (even if it's pending, or in process, they'll vet the IP anyway). Rather than just the idea... it shows that you've done more than simply come up with a rough concept, but that you've actually taken steps to protect it (which they may see as valuable if the idea has merit).
David Pariseau
0
0
David Pariseau Entrepreneur
CTO and CoFounder at Particles Plus
That said, I agree with the previous comments that the idea is only a part of the package. The person/team is key to turning the idea into a reality, so if you're looking for funding to actually implement the idea and turn it into a company then you need more than the idea, you need some kind of execution plan to turn it into reality. Investors want to see how you turn the idea into a successful company.
Gray Holland
1
0
Gray Holland Entrepreneur • Advisor
founder / director at UX-FLO
Stealing ideas is a separate topic it seems -- this is always possible, but not likely until you have substantial traction -- at that point you have a customer base that is your greatest asset and protection against competition.

As far as your question, you effort into your idea is your sweat equity, when you form the "company" you own 100% of it and you decide to "hold" the all of the value of that sweat equity in that company... If you get investment they are buying into that business entity (and diluting your ownership in return). Its your idea and sweat, you form the company -- no need for "converting" it -- you form it.

Ideally you do this before approaching investors, but its not necessary. The advantage of setting up the legal business first, is you setup all the "rules" that run that company (including how your equity works and lots of 83B tax stuff, etc.) If you wait then you and the investors will be setting it up and all that stuff will be on the negotiation table. Up to you...
Aleksey Malyshev
1
0
Aleksey Malyshev Entrepreneur
Software Engineer at iTouch Biometrics, LLC
I have an MBA degree from a business school in San Francisco. I met some very prominent businessmen, who said that patent protections is a waste of time. Many teachers also promoted the idea that patents are useless these days because everything changes quickly. You should be quick enough to outperform your competitors anyway. Does this idea look extreme to you?
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