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Is My Idea Legal?

Follow these tips to determine whether or not your business idea is legal.
January 14, 2002
URL: http://www.entrepreneur.com/article/48102

A good rule of thumb for whether things are legal is to follow your instincts about right and wrong. Generally, the court system works by the judges and juries deciding what they think is right and then finding a legal argument to support that outcome, so most of what seems illegal usually is--especially if it's also very profitable.

If you have an idea and want to check out whether it's legal, try first doing the recommended research for your business plan. Research far enough into any business idea, and areas for further legal inquiry should appear.

For example, let's say you have an idea for selling your encrypting software internationally. You think you can make tons of money, since, after all, you create it once and then license it over and over with little overhead. While assembling your business plan, you begin to research export laws and how to get export licenses as part of figuring your start-up costs. You discover that the U.S. government requires export licenses and that there are three government agencies that oversee sales and contracts made with countries abroad--the Department of Commerce, the Department of Defense and the Department of State. Suddenly, the easy and profitable idea is not so easy and profitable, and may not be legal either, depending on what all these regulations say.

Once you have done enough basic research into your idea to know the legal areas that need further investigation, there are several ways to conduct your research:

When you get inside the library, ask the librarian to point you to the law treatises in the reserve section. This section will have shelves and shelves of the reference books that lawyers read to understand the law, in summary, by type of law. There are books on contracts, property, the law by state, trademark and tons of useful information.

Note: The information in this column is provided by the author, not Entrepreneur.com. All answers are general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely on this information. Because laws change over time and in different jurisdictions, it is imperative that you consult an attorney in your area regarding legal matters and an accountant regarding tax matters.


Judith A. Silver, Esq., is the CEO and founder of Silver Law Inc., a technology and business law practice, and Coollawyer Inc., a legal publishing company on the web. Prior to starting her companies, she served as in-house counsel at Adobe Systems and Sabre/Travelocity.com. She holds a bachelor's degree cum laude from Cornell University and her juris doctorate from the University of California, Hastings College of the Law, in San Francisco.