Protect business idea

Business method patent

It is difficult to protect a business idea. The South African Patents Act specifically excludes “a method of doing business” from being patented.

Below are examples of business methods that cannot be protected by patents:

• a new restaurant specialising in Dutch / Austrian fusion cuisine;
• a new bar in Sandton that serves only Umqombothi beer and dried Mopane worms;
• a new pawn shop adjacent the Shell garage on Louis Botha Avenue;
• a new shoe repair shop located at the exit of a mine;
• a new Latin dance class for ladies in Norwood’s old age home;
• driving lessons with instruction in Xhosa;
• selling flip flops via a cellphone app;
• a new insurance product covering loss of expensive pens;
• a new charity for supporting people with red hair;
• importing a new bubblegum from a US supplier into South Africa and selling it to teenagers via Cardies; and
• a new printer cartridge refill service with drop-off bins outside Pick ‘n Pays.

All the above may be good ideas for businesses, but they cannot be protected by a patent.

Business method confidentiality

If you have kept your business idea “secret”, and you need to disclose it to someone, you can try prevent the recipient from “stealing” it by asking him to sign confidentiality undertaking / Non-Disclosure Agreement (NDA). But, following public launch of your business, the information will cease being “secret”, and you may as well throw the signed confidentiality away.

So, this is also not very effective … in the long term.

Business method trademark

But think of successful service businesses – KPMG (accounting), McKinsey (consulting), Dial-a-Nerd (computer stuff), Early Bird (tv repair), Roto Rooter (drain unblocking) – they are all successful despite not enjoying patent protection. Their businesses are protected by trademarks only.

Our suggestion is:

• protect your business name by filing a trademark. This will prevent others from offering a similar service under a similar name;
• be the first to market with your service, with strict quality control to generate a reputation in your trademarked name; and
• keep evolving and marketing to stay ahead of your competitors and maintain the reputation in your trademark.

Whereas a patent would have expired in 20 years’ time, a trademark can be kept in force in perpetuity.