After seeing her product stolen and sold by a multinational healthcare company, Amanda Clark says she felt “absolutely powerless”.
“I remember going to an IP lawyer, who took one look at the size of the company and said: ‘Do you really want to pursue this?’,” she says.
“I knew if they launched any sort of legal defence, I couldn’t match it.”
Clark is the founder of nutrition and weight-loss consultancy Great Ideas in Nutrition, and in 2006 had released a product called Portion Perfection, a book and plate combo which helped dieters better portion their meals.
The founder was showing off the product at a trade show when a representative from the multinational approached her and asked if they could collaborate on creating a version of the product for the larger company.
“They said they absolutely loved it, but afterwards no one got in touch. Eventually, they told me while they were thinking about doing something, they decided against it. So at the time I just moved on,” she says.
However, a few years later, the company released an almost carbon-copy of Clark’s portion plate, complete with an accompanying book, similar logo, and even a similar colour scheme.
Clark quickly went to the company with her concerns and did end up penning a legal letter to the multinational, who dismissed her complaints and said the product was an independent idea. Years later, despite switching up the design of the initial copy of Clark’s product, she says the business is still selling her product.
“I hope one day they’ll stop,” she says.
A very common line
Clark’s feeling of being powerless to stop such cases of IP theft is one which runs commonly through the small business and startup community. Founders regularly see large corporates ‘take inspiration’ from their designs and products, and outside of long, expensive legal battles, there’s not much which can be done about it.
And while some business owners brush it off as validation or a form of flattery, the ongoing success of a business can be gravely affected by the actions of an ‘inspired’ big business.
It’s a situation chief executive of startup accelerator BlueChilli Sebastien Eckersley-Maslin says he’s seen time and time again, which has led the startup guru to question the intention of many large firms who seek to partner with Australian startups.
“Intentions are not always pure with some of these companies. Often they’re just collecting data on new ideas to present to their clients as their own,” he says.
Eckersley-Maslin says he’s seen “horror stories” of situations where large corporates have offered to partner or invest in local startups, and have proceeded to suck out the startup’s IP to use on their own products.
“I saw an ASX-listed company who was looking to invest in the capabilities of one of our startups, and like any startup, they were running low on money so they were keen.
“The conversation got to the pointy end, and then the management team of the larger company saw the startup was running low on money so they decided to wait until the startup was more desperate.
“They then did a completely different deal, which ended up killing the startup,” he says.
Don’t confuse customers with investors
For Clark, she’s kept soldiering on, taking solace in the fact the company who wronged her has no idea what she’s doing next. She says the experience has taught her the bleak reality of copyright and IP protection strategies, which she calls “fairly weak”.
“They’re much weaker than I thought they were, and pretty much unless you have a patent and you’re willing and able to fight it there’s not much you can do about someone breaching your trademark,” she says.
And when it comes to registering trademarks and patents, IP lawyers have told SmartCompany it’s often far too expensive to consider, with director at Hitch Advisory Nicholas Hitchens saying design trademarks can cost thousands of dollars.
“Even if you’ve got it registered, if you think someone’s stolen your design, you’ve still got to book a date with them in Federal Court,” Hitchens said
“You just have to move away and take solace in the fact that you were innovative once, and hopefully you’ll be innovative again,” he added.
In light of these situations, businesses should never “confuse customers with investors” says Eckersley-Maslin, with startups needing to be vigilant about the true intentions of large companies who come knocking.
“Know where they are in terms of strategy, and always have a plan B or C, because anything can happen and intentions are not obvious,” he says.
“The best way for companies to defend against unscrupulous partners is to grow fast.”
Ideas should be shared
Another Australian startup founder who’s found himself handed the short end of the idea-stealing stick is Vaibhav Namburi, who found himself discussing ideas for a new startup with an acquaintance of his at the time.
Though Namburi’s idea had just a “loose relation” to the business his acquaintance was running, a few weeks later that business owner injected a similar service to what Namburi was intending to provide into his already-existing business.
But instead of getting irritated, Namburi says he took a different view, with the other founder ending up saving him time and effort by validating the product he was looking to build.
“When someone steals your idea, the only difference between you and them is that they executed on it, and in the end whoever executes best is who wins,” he says.
“When I wrote about it, people were throwing sympathy at me, but honestly I think an idea doesn’t mean jack shit unless you execute on it.”
At the time, Namburi could see the other founder’s product and how it was working, which enabled him to improve the product he intended to launch. In the end, he thinks companies should focus more on selling the story rather than strictly selling their products, and founders should never be afraid to share their ideas.
“Every idea should be shared because they need mass validation. Do you think that people would have gotten into strangers cars to be dropped home years ago without being exposed to it first?
“In the end, share and keep your execution plan to yourself, but let other people know about what you’re doing. Discussion about ideas should always be free-flowing,” he says.