How To Protect Your Business Against Inevitable Copying?

 Copying is so rife in business that if you have a profitable niche or concept, it would be surprising if competitors didn’t sooner or later try to capture some of your market share.

They will borrow freely from other businesses that they believe have identified lucrative market opportunities. If they cross the bounds of acceptable, legitimate competition and engage in unethical practices, how will the law help you?

What is unacceptable copying?

This automatically raises the question what is acceptable and unacceptable copying? What legal protections might a business use in such situations?

For example, Airbnb and Groupon came up with novel business concepts which were quickly copied. An example of how quickly competitors copy a new business idea is apparent when you consider the numerous Airbnb competitors that have sprung up, such as Gogobot, Atraveo and SunnyRentals using similar business models to Airbnb

Whether the business model is copied in the same country or elsewhere, there is nothing that can be done to prevent others copying what is merely a good idea.

Tropicalisation

Indeed, ‘tropicalisation’ is a term which refers to the practice of investing in start-ups which take an established business model and adapt it to an emerging market. Examples include Peixe Urbano a Brazilian clone of Groupon which is arguably even more successful than the original, Weibo the Chinese Twitter-like microblogging platform, RenRen the Chinese version of Facebook, Baidu the Chinese take on Google and Alibaba a Chinese copy of eBay. Alibaba is now one of the most successful online businesses.

Investors are keen on these projects as the business models are proven already, and from an IP perspective there are few legal barriers to this tactic, as the law does not protect bare business models, whether through patents, copyright or otherwise.

That said, a patent can protect the technology which is central to a product, copyright can protect the expression of a concept, for example training and marketing materials, videos, source code and other key materials like your business plan itself.  Trademarks protect your business and product names, and designs protects aesthetic aspects of your products, software or website.

Securing rights over your name is how you protect the underlying business

So, although there is little you can do to prevent a competitor from creating a new business based on your model it would be a mistake to ignore IP rights as mentioned in my blog post Intellectual Property Rights – Why Ignoring Them Could Be Disastrous For UK Business.  Your business name provides an important opportunity to prevent others from taking unfair advantage of your efforts, and trading on the back of your success.

So there are ways in which you can put a stop to some unfair competitive practices by properly protecting your business. When businesses copy others they tend to adopt a similar name in order to attract business towards themselves.

Scrabulous

When Scrabulous set up its online game it wanted to suggest to the market that this was a similar game to Scrabble, so it used a name suggestive of Scrabble. Because trademark law helps you to prevent piggy backing off the success of your brand, Scrabble was able to get Facebook to pull the Scrabulous App off Facebook even though it was extremely popular.

There may be other practices businesses engage in, such as stealing competitive information, taking your staff and using your confidential information, or even stealing your database.   In all such cases you are likely to have an uphill climb during litigation unless you have taken steps to have the right contracts in place and to establish your rights to the maximum extent possible, so that it would be easy to prove your case.

Competition

As Seth Godin says of competition in Purple Cow (Penguin Books, 2003): “Why do birds fly in formation? Because the birds that follow the leader have an easier flight. The leader breaks the wind resistance, and the following birds can fly far more efficiently”.

So if you demonstrate a breakthrough idea, and others can see that it’s a good one, they will copy it. They will benefit from the fact that you’ve shown them the way forward to possibly implement the idea even better than you did.

The way to have strong IP protection in your business is to secure as many of IP rights as you can afford to secure because each IP right protects you in subtly different ways and situations. However, there is a lot more to it than just IP registrations. Often it will involve having the right employment and confidentiality agreements in place too, and having effective terms of business.

If you’re worried about protecting your IP, why not start by taking our 3 minute test.