A business idea is defined as any type of concept that could potentially be marketed and sold for commercial profit. Business ideas are essentially the backbone of any company and tend to focus on either a product that can be sold or a service that can be provided to consumers for financial gain. Regardless of the idea, they typically involve some sort of new innovation, upgrade, or approach to an existing product or service.
Some examples of common business ideas include:
- New forms of technology (e.g., from desktops to laptops, landlines to cell phones, books to e-books, etc.);
- Service providers that are not found in a certain area yet, such as chain restaurants, grocery stores, gas stations, telecommunications, or utilities;
- New fashion trends or clothing designs;
- Promotional package deals (e.g., bundling TV streaming and music services); and
- New ways to perform a service (e.g., from hotels to renting a person’s house, taxis to ride share services, take-out orders to online delivery services, etc.).
Almost any type of business idea can turn a profit if they are marketed, produced, and managed properly and in accordance with business laws. Although businesses are usually formed when a group of persons decide to execute a business idea, you really only need one person to start a business.
What are Some Common Business Idea Legal Disputes?
A business idea can be a powerful tool for a company to use as a way to generate and increase profits. Hence, why there is often so much competition circling great business ideas. However, having a good business idea can also lead to a number of different kinds of legal disputes that eventually turn into lawsuits.
Some common legal disputes that may arise in connection with a business idea may include:
- Infringement of intellectual property or violation of intellectual property laws (e.g., stealing or using a business’s registered copyright, trademark, patented innovation, or company trade secret);
- Insider trading violations;
- Breach of contract and various contract clauses (e.g., non-compete clause);
- Unfair competition practices; and/or
- Mismanagement of funds.
Perhaps the most prominent concern when it comes to having a business idea is preventing a competitor or other business from stealing the idea or using it without the consent of the person or entity whose idea it was in the first place.
A notorious example of a stolen business idea dispute involved a well-known social media platform. A lawsuit was filed against the party who allegedly “stole” the business idea, but in the end, the parties settled the case and the individual who executed the idea is still the current owner of that social media platform.
The reason as to why the alleged “thief” was able to retain the rights and ownership of that company is because there is no such thing in law as actually stealing an idea. There is an old adage that says, “Ideas beget ideas.” In other words, ideas promote innovation and no law or court would want to stifle that freedom.
On the other hand, a business can protect a material idea, such as a blueprint to an invention, artistic works that fall under copyright law, and anything physical that they have created and is covered by intellectual property laws. Just blurting out a random idea would not provide grounds to file a lawsuit.
Thus, it is extremely important that a person or entity protect their business ideas (whether concrete or not) and only share them with parties whom they trust. In some cases, it may be prudent for a business to have anyone who is privy to a business idea sign a non-disclosure agreement (“NDA”).
An NDA is a type of legal contract formed between two or more parties who agree not to disclose any information covered under the provisions of that contract. The purpose of a business NDA is to protect sensitive and confidential information about a company. Though an NDA cannot do much in terms of protecting a business secret once a secret is leaked, it can result in serious legal penalties for the person or entity who breaches it.
What are the Remedies for a Business Idea Legal Dispute?
The most common type of remedy for a legal dispute involving a business idea is a monetary damages award, which is issued to the prevailing party in the case. This can help reimburse that party for any financial losses they suffered due to the other party’s violation, such as lost profits, lost future earnings, lost business opportunities, and so forth.
Other remedies for a legal dispute involving a business idea will depend on the nature of the violation, the facts surrounding a specific case, and the laws that apply to the matter. For instance, if a party stole another business’s equipment, inventory, or prototype, then they may be ordered to return that property to the original business that they stole it from.
Another example of a potential remedy would be a court injunction. An injunction is simply a court order that tells the party who receives it to either do something to fix a violation, or to refrain from doing something, so that they are no longer in violation. For instance, in a lawsuit for infringement of intellectual property, the court would issue an injunction on the party that is violating intellectual property laws (e.g., using and profiting off of the other party’s trademark).
One last example of possible remedies for business disputes is what a non-violating party can recover if the terms of an NDA are breached. Depending on the terms of an NDA, a party who leaks a business secret may have to pay exorbitant damages, mandatory restitution, other civil and/or criminal fines, and could lose their job or company. Outside of court, the individual or entity being punished could also lose their business and personal reputation.
Finally, in extreme cases, a court may also award a non-violating party punitive damages. Additionally, some issues in legal disputes allow for criminal penalties, such as having to pay fines or needing to serve a prison sentence.
Do I Need a Lawyer for Help Resolving a Business Idea Legal Disputes?
A business idea can be a very valuable piece of information for a company or organization. In some cases, it could mean the difference between increasing in revenue and size, or going bankrupt. Thus, if you have any concerns regarding a business idea or are involved in a legal dispute over a business, then it may be in your best interest to hire a local business lawyer for further advice.
An experienced business lawyer can assess the facts of your matter and from their findings will be able to determine whether you have any options for legal recourse. Your lawyer can then explain what those potential options are and can discuss what types of remedies you may be able to recover from them, depending on which option you choose.
Your lawyer can also conduct further research on your issue and can help you gather evidence to see if you have a solid case. In addition, your lawyer can assist you in preparing, drafting, and submitting legal documents to initiate a lawsuit against the other party. Lastly, your lawyer can also provide representation in court, or alternatively, at a settlement conference.