All businesses own intellectual property that could be advantageous to competitors if it was ever released by an employee or associate. Through the course of bringing a concept or invention to market, there are many legitimate reasons why an inventor or company would need to disclose confidential information. For example, it may be necessary to work with the design firm or manufacturer to help develop, prototype and produce the product. If you’re a startup, you may need to disclose your concept to a bank, potential business partners or venture capitalists. In these scenarios (and others), it’s important to obtain a signed Non-Disclosure Agreement (NDA) or Confidential Disclosure Agreement (CDA) from the party receiving the confidential information. Failure to do so could leave you vulnerable and negatively impact your ability to get patent protection in the future.

Internal Non-Disclosure Agreements

One of the primary concerns regarding IP ownership is internal stealing by company employees who can use it if disagreements arise during their employment. Many agreements not only include a gag order with respect to specific information about the property, but can also extend for a specific amount of time following any termination by the company or resignation by the employee or business associate. It is always a good idea to have an agreement that is legally sound and comprehensive for an employee or associate when they are being given a high-level position in the company.

This can be accomplished by devising the agreement and presenting the standard NDA to an IP attorney for evaluation. Once finalized, the agreement should be the first document an official employee is required to sign before even allowed into the business computer system or operational locations.

External Associate Non-Disclosure Agreements

An external confidentiality agreement can be a bit more complicated. Many times the external agreements are connected to a potential investor or co-owner of a business. This is particularly an issue for software developers and other digital businesses that operate solely in a digital environment. One of the best ways to ensure against this possible leakage is to apply for an official ownership license before even beginning business use. While some intellectual property includes a finished product, it usually begins as an idea that can be described in full detail in a written document or drawings, such as those used in invention applications. This also includes trademarking the business name beforehand, as well as any logos. Intellectual property license applications receive an automatic one-year operational period with any certified received application, so there is a protection method to implement before beginning use of the property or invention even when the license has not been finalized. It also allows for a retroactive period in the event an unscrupulous actor attempts to steal or sell the idea to another party.

Always remember that the purpose of a confidentiality agreement is not to restrict someone from transferring the information. It is merely a piece of paper. What it actually does is establish legal standing to sue for breach of contract in the event the information is leaked and the agreement violator is identified. This is also why evaluation is important from an attorney who is highly experienced in contract law. If you are interested in bringing a product to market or launching a business or would like a referral to an IP attorney, please contact us today.

Note: This page is intended to provide legal information. It is not legal advice and should not be taken as such. If you have specific questions about a legal matter, please contact your attorney.