If you’ve designed a potentially marketable invention, you are faced with a dilemma. To make money using the invention, you need to generally license the rights for it to another business, often a company or a distributor. In pitching the innovation to potential licensees, you are in the risk of disclosing so much information that the invention might be stolen or isn’t protected by law.
So how can you sell your innovation around without threatening your rights? To protect yourself you’ll have to file a provisional patent application (if ones invention is patentable) or make use of a nondisclosure agreement (if it’s not patentable). If a potential licensee refuses to sign a nondisclosure deal, extra precautions should be taken like invention marketing.
Using Nondisclosure Contracts:
Nondisclosure agreements range in format. Typically, they contain these important elements:
• a definition of what is and what is not a confidential information,
• obligations from the receiving party, and
• time periods.
What actually is Confidential. Every nondisclosure agreement gives a definition of private information or buying and selling secrets. Every nondisclosure deal also specifically excludes some information from safety, meaning that the receiving party doesn’t have any obligation to safeguard that information. Information isn’t protected if it is turned out created or identified before or independent of any involvement with you.
Obligations of the Receiving Party. Confidential information shared with a person or company must be held with confidence and its use must be limited. Under nearly all state laws, the receiving party cannot breach the private relationship, induce others for you to breach it or perhaps induce others to obtain the confidential details by improper means. Most companies take these obligations with no discussion. If you enter a mutual nondisclosure agreement (where you also agree to keep the information confidential), you should also feel comfortable with one of these requirements.
Time Intervals. How long must the information be kept private? This issue is often a subject of discussion. Disclosing parties want a long period; receiving parties want a brief one. Five years is a common length in the USA, although many firms insist on no more than two or more years. In Europe, it’s not unusual for the time to be as long as ten years.
Disclosing Lacking any Agreement
It’s always safest to acquire a prospective licensee for you to sign a nondisclosure deal, but you may well not always have the capacity to convince them to do this. When that happens, you are left in a vulnerable position. If you disclose crucial information without the agreement, you risk dropping your rights on the invention. If you do not disclose it, you risk losing a good opportunity. Probably the most crucial factor to consider could be the reputation of the individual or company you’re coping with. If the company carries a poor reputation, the dangers associated with losing your secrets outweigh the business enterprise opportunity.
Under trade secret law, if the secret is revealed to the public by you, you lose your rights on the secret. In other words, once you’ve disclosed the key, you can’t claim that you have exclusive rights for it.