StartUpNation:
The best way to protect your idea or intellectual property is not to disclose it at all. However, that’s just not practical if your intention is to profit from your great idea.
So at some point, you will be faced with that most frightening moment: actually disclosing your idea to one or many parties, each who represent a threat to tell the idea to others, or worse yet, to copy your idea and profit from it themselves. Using Confidentiality Agreements or Non-Disclosure Agreements (a.k.a. ‘NDA’s) are a step you can take to provide some level of protection and comfort for your intellectual property.
But frankly, NDAs are hard to enforce. Litigation is expensive and there are so many grey areas involved in making a case. The best approach to disclosing an idea is to get a signed NDA from the party in combination with the following measures…
1. Disclose intellectual property to reputable third parties. Do your homework on the person or company to whom you’ll be disclosing before actually disclosing any information.
2. Disclose intellectual property in levels of detail. Start with a general disclosure first. If the party is interested at the completion of each level of disclosure, continue with the next level of detail, and so on. In the first most general disclosure, do not disclose the essence, the ’secret sauce’. Rather, first provide information about what the invention or idea is, who the market is, how big the opportunity might be, and even discuss the nature of the relationship you are seeking with the company. If the party to whom you are disclosing your idea indicates, after the general description that they are not interested, then you have prevented an unnecessary disclosure of the essence of your invention.
3. In a similar manner, make sure you interview the third party before disclosing your idea to determine whether or not you will want to have them as a licensee of your invention or participant in your new business. You may think that a particular company for example is a good choice for licening your invention. but may find out after asking some key questions that indeed they are not. If you learn this prior to a detailed disclosure, again you have prevented an unnecessary exposure of valued information.
Many big companies will not use an NDA prepared by you and instead will only use their own. This can be just fine as long as the basic and generally accepted points are covered in the agreement. The most significant key points to protect you, the disclosing party, are as follows…
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