Q:
What's the best (and most inexpensive) way of protecting one's intellectual property during the startup and development phases of a new software company?

Answer 1:
Well, if it is a really good idea, you might consider getting an attorney anyway. You may find that you save your money (and skin) in the long run. Here is a good lawyer finder. Some attorneys might give you some free advice if they anticipate that you will retain them for the actual officiating of the documents. Try it, you'll likely be surprised. Also, it is the only way to really guarantee that you are doing things within the latest legal framework which with regard to computers is constantly evolving!

Additionally, there is a great book that covers all of this in great detail. The book is called Patent, Copyright and Trademark and includes step-by-step processes and sample forms to do each of the three and does cover tricky topics such as software.

Good Luck!


Bonus Answer from Student Body:
Greetings.
Since IP cuts a pretty wide definitional swath (any product of the human intellect) it would be helpful to have a little more info about the specific IP asset you have. Let's consider a few of the more common types of IP protection:

Copyright.
This protects expression which is an original work and fixed in a tangible medium (software, text, art, graphics) While no longer strictly necessary, it's best to place a copyright notice on every copy. Copyrights can also be registered with the USPTO (there's a USPTO website in which you can do this electronically).

Patent.
Patents protect novel and useful inventions. The primary difference between patents and copyrights is that patents protect ideas and copyrights protect the expression of ideas. Getting a patent can be a fairly expensive and lengthy process but from a cost/benefit standpoint, if you have a screamer it certainly should be considered.

Trade Secret.
In the IP context, a trade secret would be a useful process or other information which has commercial value and is a secret. Note the possible overlap w/patents. The best way to protect trade secrets is to refrain from disclosing them to anyone without a good non-disclosure agreement which prohibits disclosure and limits use to purposes which make you money. Trade secret protection is generally lost when the information is disclosed without restrictions on its use and disclosure.

Generally, a good way to protect IP is to be careful about to whom you disclose it. What to you may seem like sales cycle may be science class to someone else. Another thing is to make sure what you think you have is yours. If you developed it working for someone else, or relating to an employer's business even if developed on your own time, it might not be.

Naturally, hiring a good lawyer (read: specialist) is optimal. You'll want to have a written fee agreement with an estimate for the work you want done and, most importantly, a lawyer who you feel you can trust. If anything a lawyer tells you doesn't pass the common sense test, it's time for a second opinion. If finances prohibit getting professional help, Nolo Press puts out a great set of books on patents and copyrights. Hope it all works out.

NOTE: THE ABOVE IS PROVIDED FOR GENERAL INFORMATION PURPOSES ONLY AND SHOULD NOT BE CONSTRUED AS SPECIFIC LEGAL ADVICE. (READ: IT AIN'T MY PROBLEM)

-Fellow Dweeb


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