Legal, Startup Advice

“Don’t step on any toes”: Three tips for protecting your business against legal challenges

Dominic Powell /

As more and more Australians chase the entrepreneurial dream and strive to run their own successful small business or startup, more and more big businesses will square them up in court, say experts.

As if being a small business owner wasn’t hard enough, there’s been no shortage of startups and small businesses finding themselves in court over alleged breaches of copyright and design patents, usually thanks to big businesses taking issue with, at time slight, breaches of their tightly held trademarks.

While businesses sometimes emerge victorious, more often they’re left despondent and poor, with the immense resources of corporates and multinationals quickly draining the capabilities of their smaller counterparts.

Speaking to SmartCompany, Olivia Hitchens, an intellectual property lawyer and director at Hitch Advisory, says she’s seen an increasing number of ‘David versus Goliath’ type battles in recent years. She attributes the rise to the general increase in the number of businesses being started.

“As more and more businesses start up, more people are inspired by things and designs that are already out there,” she says.

Hitchens says while design infringements are obvious ones, the main problem she’s seeing is businesses literally “running out of names”.

“When someone comes up for a name for a business or an app, there’s a good chance it’s somewhat similar to something that already exists,” she says.

“That one common name is enough for a big business to come after an SME, despite it having no impact on the big business’ life and likely not confusing customers. All they’re doing is sending a message.”

However, when the situation is reversed and big businesses get ‘inspired’ by smaller businesses’ designs, Hitchens says there’s still often nothing SMEs can do. She believes the government needs to put in place better protections for small businesses when it does happen.

“If it’s going to mean the end of the business, some SMEs will fight it, but nine out of ten will just make changes to accomodate the bigger business,” she says.

Three tips for protecting your business

With this in mind, Hitchens says there are three things business owners or aspiring founders should take into consideration before they launch a product into the market.

1. Do your due diligence

If you have an idea for a product or app, do a bit of research to see what’s already out there.

“Find out what else is operating in the space and see what words they use and what colour schemes they have. Make sure you’re not going to step on any toes,” says Hitchens.

2. Get some NDAs

After you’ve done your due diligence and you’re satisfied your product is sound, Hitchens says you should think about handing out some non-disclosure agreements (NDAs) to your suppliers and programmers.

This is to protect your idea and stop it from leaking out to other businesses who could potentially copy it.

3. Protect your IP

Though it might seem obvious, applying for patents and trademarks for your business and its designs will likely give you the best chance when it comes to protecting your business from the big dogs.

“Do this so when you do launch, you give yourself the best possible protection for your IP,” Hitchens says.

NOW READ: How to protect your “million-dollar idea”: Six legal tips on intellectual property for startups

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Dominic Powell

Dominic is the features and profiles editor at SmartCompany.

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