The Anchor Plate : Intellectual Property Lawyers & Attorneys : BrickHouse Law Group : Open-Price Lawyering, Hourly Billing : St. Louis, Missouri

"Two guys walk into a law office . . . "

One of the most frequent scenarios these days at BrickHouse Law involves some version of the following: Somebody comes in with a great idea for a new business, filled with excitement about how they are going to replace Facebook, or eliminate the need for shoes, etc.  You get the picture.

Some of the ideas sound great -- others, well, lets just say they need a little more time on the proverbial drawing board. No matter how varied the ideas, though -- one thing is true about all of them: they cannot be protected (not in their "idea only" form).

This is one of the most important lessons all entrepreneurs need to learn (and learning it can sometimes be very expensive).

You cannot copyright an idea -- only the original expression of that idea.

You cannot patent an idea -- only the invention that embodies that idea.

You cannot trademark an idea -- only the names of the businesses and products and services embodying the idea.

So what do you do when you have the NEXT GREAT IDEA but you haven't developed it yet?  You need investors, perhaps manufacturers, distributors, etc., all of whom are going to need to know what your idea is.  That's where confidentiality and nondisclosure agreements ("NDA's") come in. Most entrepreneurs have heard of NDA's -- but many do not use them as early in the process as they should. 

When should you use an NDA?  At the moment you start talking seriously with your future business partners. That's right -- many times the most important contract you will sign is the first one with your business partner.  In addition to confidentiality, that first contract should identify any ideas, concepts, treatments, designs, etc. that have already been created by you and your business partner and include language assigning ownership of this IP to your new company. 

This is really only the beginning of the entreprenurial process, of course, and is not meant to cover everything that should be in your first agreement. In fact, my friend Diana Kander has a very helpful post entitled "10 Things You Must Answer Before Signing a Non-Disclosure Agreement." Check it out.  My point is simply this -- the best time for you and your business partner to agree on the important stuff is before anyone has made any money!

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"Our competitor is infringing our trademark and killing our business! You've got to make them stop, whatever it takes!  (pause . . . wait for it . . . )  But we can't afford an expensive lawsuit, especially when we have no idea what it will cost.  Which way do we go?"

So say many of today's clients.

It's 2010 and the client revolution is in full swing -- lawyers are finding that they may just have to justify their bills based on the value received by their clients, not just the amount of time the lawyers devoted to a matter. If you think about it, this shouldn't come as much of a surprise, but somehow it seems like virgin territory for many lawyers.

Of course, certain types of transactional practices have been offering so-called "alternative fee arrangements" for years -- billing by the document or deal, for example -- but it's much less common in a litigation practice.  Most lawyers will tell you this is because litigation is, by definition, an exercise in managing uncertainty.  With apologies to Heisenberg's Quantum Mechanics, many litigators seem to have their own "Uncertainty Principle," which goes something like: "If you don't know what the other side will do, or what the court will do, how can you predict what the case will cost?"

Jay Shepherd disagrees.

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