As an engineering student, or maybe someone with on-the-job EE experience, you may dream of a great product idea that could make you famous or line your pockets with cash. Tucked away in a hidden corner of your brain, it’s just waiting for the right moment to be set free. But what are some of the legal challenges and steps to know should you try to push your idea forward in the marketplace? We should start this discussion by saying that any serious advice in this area is probably best left to legal experts, which we are not. We can, however, give you some broad things to watch out for and plan for, if and when you decide to begin your new product adventure. Our friends over at OnlineComponents.com have also addressed this and have a different view of this topic posted here: What Legal Liabilities Should Be Considered When Designing a Product?
The First Steps
Legal problems with new product development typically fall into three broad categories: protecting the idea, minimizing liability that may arise from developing the idea, and controlling the idea into the future. Each has its own risks and its own solutions, but the common denominator is that bad things can happen to you and your product idea if you don’t take early steps to understand the new product marketplace, ensure the integrity of your design, and prepare to defend your rights. Research and plan early should be your mantra. Let’s explore each of these topics.
Protecting Your Idea
Since you don’t want to risk losing your grand idea to another person or company, either through imitation or outright theft, you need to do some early homework. And the first question you need to ask yourself is, how close is your new product idea to an existing product in the marketplace?
You can do this through a patent, or patent application search, and a trademark search to look for names and designs similar to your own. Trademark protection only applies to brands, logos, or slogans related to a specific product but can offer another layer of protection to you.
If you’re reasonably certain of the uniqueness of your idea, you can opt for your own patent protection, which can last for 20 years if you renew it annually. Remember, however, that before you set up patent protection, your idea can be taken by just about anyone, including partners or investors. Prior to full patent protection, you can apply for a provisional patent, which allows you to claim “patent-pending” status.
Minimizing Liability
This is probably the easiest legal issue to understand. If your product doesn’t work, or if it doesn’t work as claimed, you may be open to legal efforts to stop your sales and distribution, or to claim damages due to the use of it. Simply put, your product must work, and it cannot harm people, animals, or the environment. Flaws in the basic design, the manufacturing process used to make it, or the components used in it can all be legitimate factors in litigation against you. In most cases, product disclaimers or warning labels, while they may sound ominous and iron-clad, are not legally binding and will not help prevent litigation against you.
Controlling Your Idea
As we’ve noted, patent protection is usually the best means to control your idea going forward, but remember that you will have to defend your patent against infringement, which can take time, effort, and money. And keep in mind that before you set up patent protection, your idea is fair game.
Many engineers believe they can easily develop an idea and license it to a larger company for royalty fees. While confidentiality and non-disclosure agreements can help protect you in this regard, they are not foolproof. Sadly, presenting your idea to anyone before it is protected leaves you little recourse if it is appropriated.
A Word About Regulations
If your product idea will be used in a critical industry or by a consumer audience, it may also be subject to governmental regulations on the components and materials used in it and also the way it is manufactured. The regulatory environment is meant to protect the audiences that might be using a product, not the manufacturer of the product. Obviously, an early and thorough review of regulations, if applicable to your idea, may be warranted.
Summary
Developing ideas for new products is fun, stimulating, and may even be financially fulfilling. The takeaway from all this is to research your market, competition, regulatory hurdles, and safety issues well in advance of actually moving forward with your great idea. Be prepared for unanticipated legal risk in each step of your product design and development process. It’s one of the best ways to smooth out the road to success.
