How to Protect an App Idea From Being Stolen
September 26, 2023
In 2007, a Motorola engineer named Hanjuan Jin was stopped by customs agents at O'Hare Airport. When they searched her carry-on luggage, they found Motorola documents marked "confidential and proprietary," $30,000 in cash, and a one-way ticket to Beijing. As a result, the woman was arrested. She was later found guilty of theft of trade secrets, but acquitted of involvement in economic espionage for China.
When entrepreneurs read news like this, they probably think: If giants like Motorola can't protect themselves from intellectual property loss, how can I? The truth is that it's very hard to do, but it's worth a try.
As an outsourcing company, we are often approached by various entrepreneurs who have good ideas and want to bring them to life. These are people of different ages, nationalities, social status, but there is something that unites them all. They fear that their unique app ideas might be stolen. As a result, their minds are flooded with a myriad of questions. How can I protect my app idea? What precautions should I take to protect an idea for an app? How can I prevent someone from stealing my source code? How can I give a developer access to the source code without them being able to steal or duplicate it?
Unfortunately, there is no one right and effective way to protect an idea. But that doesn't mean that entrepreneurs should give up and rely only on Lady Luck. We believe that it's better to use all available preventive methods and learn how to protect the app idea.
Check Developers Background
First and foremost, entrepreneurs should do a background check on the developers and outsourcing company they want to work with. As they share their unique ideas with developers and entrust them with the company's most valuable resources, they need to be sure that they will be working with professional and reliable people. Therefore, it is important to pay attention to the following details when hiring a software developer:
Overall experience in the IT sector. Only an experienced company with well-established procedures, accumulated experience and knowledge will be able to create a truly high-quality and in-demand product. Such a company will not only be able to turn the idea into reality, but will never risk its reputation and steal other people's ideas for their own profit.
Experience in the field to which your future app belongs. This point is important if entrepreneurs want to deal with narrow or complicated industries such as retail, mobile gaming, data analytics, etc. If it is a general business-to-customer (B2C) product, such as rent or delivery, experience is not so critical.
References from previous customers or employers. While most outsource companies post reviews on their websites, it's also worth checking their reputations in search results and social media. It's also reasonable to assess reviews on leading tech listings such as Clutch, DesignRush, GoodFirms, etc.
Sign a Non-disclosure Agreement
Signing a non-disclosure agreement (NDA) is one of the most popular and effective ways to legally protect an app idea. The NDA is an agreement between an individual and a development service provider that ensures the confidentiality of all information shared as part of a project and prohibits its disclosure to unauthorized parties.
The NDA ensures the highest level of security for all information exchanged between two parties. So, after signing it, a person can freely explain their idea to the development team and achieve the desired goal. Professional developers usually have no problems with signing the NDA. And most importantly, they are aware of all the consequences that this legal agreement entails.
By signing the NDA, the developers showcase their commitment to professionalism and their profound respect for confidentiality. This not only nurtures trust between the developers and customers but also strengthens their bond. The customers are more likely to share confidential information with the developers who have agreed to keep it confidential.
The agreement must clearly and unambiguously state that the customer owns the intellectual property rights to the app. To this end, the NDA should include a separate clause dealing with intellectual property rights.
If an entrepreneur hires developers to create an app, they should make sure that the agreement states that all intellectual property rights to the software belong to them. If they collaborate with other programmers and plan to jointly own the app, the document should specify who owns what and how revenue from the app will be distributed.
Undoubtedly, the NDA has many advantages over other types of agreements when developing an application. However, it may also be insufficient, or sometimes it may even have negative effects.
It should be noted that at this stage the NDA may cause more inconvenience than benefit. It is important to keep a balance here. Of course, there is always risk when sharing an idea with potential funders. But stakeholders will not invest in the project if the entrepreneur refuses to disclose details before signing the NDA. At this stage, the both parties can discuss the idea, the general product concept, and the technologies to be used in development. The rest of the information can be shared after the contract is signed.
Development Team Assignment Stage
The same confidentiality requirements apply at this stage. Potential developers should be informed about the task and the scope of work to be done, at least in general terms. However, the entrepreneurs can keep the basic concept secret until the agreement is signed. They can discuss with the team potential problems and challenges they might encounter during the development process, but without discussing specific details. It is advisable to sign the NDA at the same time as the development agreement.
Reserve the Name of Your Future App
Not many people know that they can reserve the name of their upcoming app, and it's absolutely easy to do. A person just needs to visit the App Store to make sure that no other apps have the same name. In the App Store, it is possible to reserve a name in advance, so that the name of the app remains untouchable for others.
Here is an easy step-by-step guide on how to do it:
- Log into iTunes Connect account,
- Head to "My Apps" section,
- Select "New App",
- Complete the information,
- Click "Create".
In Google Play, reserving the app name is not required because there may be multiple apps with the same name. Google Play allows developers to reserve the exact same name as an existing one. But here it's more reasonable to use a unique name for the application to avoid confusion among users. Imagine people's surprise if they see several apps with the same name.
Also, remember that the name of an app in the Google Play Store can be up to 30 characters long. Therefore, it is better to keep the app name short so that it is not truncated when browsing the store.
How to Protect Software From Theft
Having extensive experience with entrepreneurs, we can describe a typical situation and use it as an example to explain how to protect software from theft.
Let's imagine John, a young entrepreneur who has already put his idea into practice and founded his own startup. When it reached its first 3,000 customers, the team of developers John was working with left. Now the young man wants to hire freelancers to add new features to the app and fix bugs. But one question worries him: How can I give them access to my source code while protecting it from leaks or resale?
On the one hand, John's concerns are valid. After all, he has invested so much money, time, and effort into creating the source code. Its value cannot be overstated when it comes to a company's assets. So if it is stolen or leaked, it can cause colossal damage to the company. So it's no wonder that John wants to keep the source code safe. How can he do that?
Access to the Source Code
Determine who has access to the source code. It's a fundamental step in protecting against theft. It is important to limit the number of people who have access to the source code. This can be achieved by setting up an authentication system with user accounts and passwords. This ensures that only authorized personnel can view and modify the source code.
Compartmentalize the Code
There is usually no need to give a developer access to the whole code. Technically, it is best to compartmentalize the code and provide freelancers only with the specific parts they are working on. Global access to the source code poses potential security risks and should always be avoided unless absolutely necessary.
Copyright and Patents
John should also make sure that all his software concepts and inventions are protected by copyright and patents. What is the difference between these two? While patents protect the idea, copyright protects the written code.
The thing is, John can't copyright an app idea. He needs to put his idea into some tangible form for it to be protected under copyright law. For example, when he writes a code for a future app, that is something tangible, and consequently, it can be protected. When hiring developers or an outsourcing company, John must ensure that the contract explicitly specifies him as the rightful owner of the code. Copyright is not limited to software code only. Everything John's app contains (videos, images, sounds, graphics, articles, etc.) is subject to copyright protection.
How can he patent an app idea? If John's app is unique in its functionality and features, if it provides a new technical solution to a problem or represents a new way of doing something, it's patentable. Patents provide stronger protection than copyright because they contain strict requirements such as novelty, usefulness and non-obviousness. However, there are also some disadvantages: Application patents take 2 to 3 years to issue, and they're quite expensive.
Trademark is another term that John and other entrepreneurs have probably heard of. The app's trademark gains value once the app is launched. By registering the trademark, John can prevent other entrepreneurs from using his app's name, logo, slogan, or design. The main advantage of using a trademark is that John's competitors will not be able to attract his potential customers by creating a similar logo, slogan, and design.
Unfortunately, even with all these measures, there is no guarantee that John's idea or software won't be stolen. That's the painful truth he and other app owners must face. Copyrights and patents can confirm ownership of the code, but they can't protect it from leaks.
The truth is that in the international market, nothing and no one can stop dishonest programmers from stealing ideas and copying others' projects. The launch of a popular project is followed by dozens of clones released a week or two after the success of the original. At the same time, nothing prevents the market leaders from remaining market leaders, while dozens of projects disappear into obscurity.
This can be easily explained by the fact that competition in the market does not take place at the level of ideas and projects, but at the level of the teams that manage these projects. In other words, it is not so much the ideas that are important, but the people with their knowledge and experience.
If we ask successful app owners what their "secret sauce" is, not many of them are likely to name a source code. The most valuable things are customers, sales, marketing and so on. Even without access to source code and data, it's easy enough to create a clone of almost any project, but without sales, reviews, and a customer base, it's impossible to succeed in the marketplace.
This does not mean that entrepreneurs should not protect their app ideas. Protecting the idea is a must! It can help them a lot if they succeed and get to the top. Because market leaders are not soft and fluffy kittens, but strong and aggressive players with powerful legal tools.
Do not hesitate to use all of the above means to protect your ideas and software. If you still have questions about this topic or need advice from professional developers, you can contact us directly using the form below.