In Part 1 I laid out the three-step invention protection plan I encourage inventors to use to help prevent their invention from being stolen. In part 2 I discussed the first step of the plan, applying for patent protection. In this post I discuss the second step of the plan, the use of non-disclosure agreements.
Step 2) Prepare a non-disclosure agreement (and get it signed)
Also referred to as an NDA or confidential disclosure agreement, a non-disclosure agreement is a standard business practice when one person or entity must disclose confidential information to another. Do not let anyone make you feel bad for having them sign an NDA. Because I deal with confidential information, I do it all the time. Search experts, translators, I require them all to sign NDAs. Make everyone you talk to sign one before you tell them any confidential information.
What is a non-disclosure agreement?
A non-disclosure agreement specifies how another entity must handle your confidential information and what they can and cannot do with it. Typically, the other party will be required to maintain the confidentiality of the information provided to them, restricting access to those with a specific need for the information. The other party also usually agrees not to disclose or make commercial use of the information for a certain period of time, for example five years.
What to do to ensure the effectiveness of your NDA
Any documentation related to your invention should be marked “confidential,” particularly if you are sending it to another party under the terms of an NDA. Anything you say orally should be summarized in writing, marked confidential, and sent shortly after your conversation. That way the other party will be certain to understand that you consider that information to fall under the terms of the agreement.
Typically, you can and should get the NDA prepared by the same patent attorney who prepared your patent application. Although non-disclosure agreements are common business contracts, patent lawyers deal with NDAs all the time and know the appropriate clauses to include for patent issues.
Once you get one NDA, you can usually swap out the name and address of the receiving party and reuse it for all your future discussions of the same confidential subject matter.
Benefits and Conclusion
An NDA gives you an extra layer of protection in case you divulge information not contained in your pending patent application or in case your application never issues as a patent.
Any questions? Please leave them in the comments below. If not, please move on to part 4, discussing the final step of the three-part plan (limiting your disclosure).
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I went to Inventhelp with a great ideal last year and now my ideal is being sold on tv now. They call it the Windshield Wonder. We had a non-disclosure agreement and I told them I needed time to get the money they needed to market it. You can’t imagine how upset I am. Is there anything I can do about this?
Thank’s Ken
Ken,
I am so sorry to hear that. You might be interested in my article about invention submission companies http://patents101.com/2009/01/should-i-use-an-invention-submission-company/.
I cannot give specific advice to a non-client. However, a good NDA does allow you to sue for damages if it is breached. Some attorneys will take lawsuits on a contingent basis, meaning that you would not need to pay any money unless the lawyer wins your lawsuit.
If you are interested in proceeding with such a lawsuit, I encourage you to contact an attorney in your state, perhaps through your local bar lawyer referral service. I would encourage you not to delay, as delay may jeopardize your ability to recover.
Also, a disclosure made under an NDA usually does not prevent you from applying for a patent. It may be that you still could apply for a patent.