In her article "The Real Danger of Going on 'Shark Tank': Copycats" for the Wall Street Journal last weekend, writer Ruth Simon documents the consequences of going public with your product idea. If it's promising, it will be imitated quickly... and even if it isn't, others may accuse you of being a thief.
As an example, Simon relays the ordeal of Lori Cheek, an entrepreneur who appeared on the show in 2014. Her dating business still doesn't have any revenue. "But it has accumulated more than $60,000 in legal bills, after a viewer of the show accused Ms. Cheek of stealing his idea." Ouch.
Here's the reality: If you have a great new product, it will get copied. Even if you have a patent, trademark, and/or copyright protection.
In my opinion, it's literally impossible to protect anything these days. Reverse engineering is as doable as ever. If counterfeiters don't steal from you outright, a close alternative may pop up on the market. And make no mistake. It's not just powerless inventors who get knocked off. Big companies in every industry do too.
In an article published in Bloomberg Businessweek last week, legal reporter Christopher Yasiejko documents an impending trial over blender patents in the packaged milkshake market, which is predicted to grow to $2.7 billion in 2022.
"At the trial, f'real Foods and Rich Products will argue that Hamilton Beach machines infringe their technology, including the processes for aeration and liquid-dispensing," Yasiejko explains. "But Hamilton Beach, of Glen Allen, Virginia, will say its blenders differ from f'real Foods's because they're not designed for aeration and don't add fluid during blending."
A lengthy and expensive legal proceeding will determine the outcome... eventually.
I've said it before and I'll say it again: The most powerful companies in the world are unable to prevent themselves from being knocked off.
So, what can you do about it? Truthfully, once it happens... not much. You can try to stop people by sending cease-and-desist letters, which sometimes works. Completely putting an end to online counterfeits is difficult at best. It's like playing whack-a-mole: You take one listing down, only to watch another pop up.
"But that's not fair!" I hear this all time. That may be true... but more importantly, it's just the way the game works today.
Honestly, as a lifelong entrepreneur, I think you should celebrate. I'm not kidding. Products that don't sell well aren't copied.
Realistically, the best thing to do is get ready. You can fight back, absolutely, but you must be prepared. My advice? Try your best to leave your emotions out of it. Speaking from experience, this is incredibly difficult to do. But the less surprised and hurt you are, the more quickly you'll be able to bounce back and execute a sound plan of action.
These are recommendations for how to prepare for -- fingers crossed -- copycats.
1. File your intellectual property early.
Trademarks, copyrights, and even design patents are all very affordable tools that can be used to take down counterfeits online. I also recommend filing a provisional patent application, which you can use to test the market.
2. Avoid unnecessary exposure.
I'm not surprised that some of the products featured on Shark Tank have been quickly copied. You shouldn't be either. That type of exposure is phenomenal. It can also be phenomenally problematic, if you're not prepared to capitalize on it immediately. Consider the pros and cons of appearing on a television show like this.
3. If you decide to crowdfund, be fully aware of the risks.
I'm a big fan of crowdfunding. It's an awesome way of testing the market to raise capital for your first shipment. But, as someone put it to me a few years ago, "Crowdfunding campaigns are like a catalogue for knockoffs." Which is to say, it's also fairly risky. I believe the biggest benefit of campaigns is as a tool to advertise. So, be ready to launch fast if you go this route.
If you are using crowdfunding as a tool to raise capital, please realize you're exposing yourself to copycats that may very well beat you to market.
4. If your intention is to license your product idea, don't bother investing in a booth at a trade show.
In my opinion, there are much better plays than hoping the right person happens to walk by and discover your product. I recommend taking your fate into your own hands by connecting with potential licensees if your goal is licensing. If you have manufacturing in place for your product idea already, that's another story. More information about when and why to debut your invention at a trade show here.
5. Don't post about your invention on social media.
Most of the time, I see people doing this out of desperation, like a kind of Hail Mary. This is not wise. Most companies that license new product ideas aren't looking for them on social media -- they don't have that kind of time. And disclosing your invention in this way may prevent you from obtaining patent protection later on.
6. Avoid companies that have a poor reputation with inventors.
Always do your homework on anyone you are considering hiring or working with. This is vitally important. Please, be thorough and make sure to investigate their presence on social media. With all the information available on the Internet today, there's no reason why you should work with anyone who has a less than a stellar reputation.
7. Market yourself as the original inventor repeatedly and creatively.
This is one of your best strategies for combating competitors today. In fact, I believe you should build your marketing strategy around your story. Use a variety of mediums and outlets to share how and why you invented the product and brought it to market, including social media, video, articles, blogs, product reviews, traditional media outlets, podcasts, photos, and more. The sky is the limit. If you build a loyal following, your community will rally around you when you need it most.
8. Start attending trade events early on.
Get to know your industry inside and out. Let people know who you are. There are many benefits of attending trade shows for product developers.
9. Reach retail buyers first.
Once again, it's all about being the original. Being the first. Sell first, sell fast.
10. Build effective partnerships.
Licensing your product idea to a major player is still one of the best protections. For an example, look no further than the saga of Bunch o Balloons inventor Josh Malone and his licensee ZURU Toys, one of the fastest growing toy companies on the planet. With ZURU by his side, Malone has been able to fight back against alleged infringers in court.