Generating and Protecting Business Ideas

BUS1

Sources of Business ideas

• Spotting trends and anticipating their impact

• Identifying a market niche

• Copy ideas from other countries

• Taking a scientific approach

Franchising

Formation and operation of a franchise

Most common type is a ‘business format franchise’.

The franchisor grants licence to the franchisee to

use their business idea.

The franchisee sells the franchisor’s products/services, trades under the franchisor’s

trademark or name, and benefits from the franchisor’s

help and support

In return, the franchisor usually pays an initial fee to the franchisor and then a percentage royalty on sales. The

franchisee owns the outlet, but the franchisor maintains control over how products and services are marketed and

sold and how their business is used

Protecting a business idea

• Copyright

• Patents

• Trademarks

CopyrightsIf a business creates or

employs someone to create an original piece of literary, dramatic, musical or artistic work, it automatically holds the copyright on the work

The material cannot be copied without permission from the owner of the copyright. The law allows the owners of the copyright to decide whether it can be copied and adapted, and allows them to charge a royalty or licence fee.

In general, the copy right protection for literary, dramatic, musical and artistic works last until 70 years after the death of the creator! Unlike Patents there is no requirement to register an authors copyright. The

law on copyright is governed by the Copyright, Designs and Patents Act

1988. Copyright is indicated by ©

PatentsIf an individual invents a new process, piece of equipment, component or product he or

she must apply for a patent in order to prevent other people

copying the invention and then making, selling, importing or using it without permission

To register a patent the inventor must provide full

drawings of the invention for the UK Intellectual Property

Office (UK-IPO), demonstrate that the ideas have original features, and promise that the ideas are his/her own

The Copyright, Designs and Patents Act 1988 gives the patent holders the monopoly right to use, make, licence or sell the

invention for up to 20 years after it has been registered.

Trademark

Trademarks can be powerful marketing tools, helping

customers to recognise the products of a business and to

distinguish them from competitors

The trademark must be registered at the Intellectual Property office. Once it has

been registered the company has exclusive

rights to its use. They are recognised by the symbol ®