Your intellectual property is just that: your property. Do what you have to do to protect it and ensure that your ideas aren’t stolen by a competitor.
If you generated ideas that have helped your company succeed, then you have generated intellectual property. Intellectual property refers to any number of unique concepts that you’ve come up with that relate to business. They include:
- Artistic works
- Literary works
And while you can get a trademark, copyright or patent to protect your intellectual property, you might also benefit from using an NDA with certain parties that you deal with.
What a Non-Disclosure Agreement Does
While patents, trademarks and copyrights keep competitors from copying your technology or design, they do not prevent people from sharing it. If you have a unique concept that you haven’t yet taken to market, you probably don’t want your competitors knowing about it. That’s where the NDA becomes relevant.
If you’re speaking to an investor or potential business partner about your intellectual property, you want to keep the information contained. Asking others to sign an NDA essentially guarantees that they will keep their lips sealed about what you share with them.
Imagine if a competitor heard of an innovative technology that you planned to launch in three months. While he couldn’t copy your technology, he could work to figure out a way to deliver a similar technology, faster. If his product launches in two months, your product comes in second when it finally does launch. You lose out on thousands of potential sales that the competitor has essentially stolen, simply by coming out with his product first. This is why intellectual property is so closely guarded.
Situations Where You Need an NDA
If you decide to bring in a business partner to manufacture part of your hardware, s/he will need to know more about how your technology works. While you can give him/her a generic sense at the outset, at some point s/he will need to sign a non-disclosure agreement so that you can delve deeper into the intellectual property you own.
Likewise, if you’ve decided to seek funding from an investor, once you’ve passed the courting stage, he will want to know your trade secrets so that he can determine whether you’re worth the investment. This is the point where you ask him to sign a non-disclosure agreement. It’s important not to bring in the NDA too early in the discussion, as an investor who hasn’t decided to invest in your company may be turned off before you’ve even given him a concept of what you do.
If you’re at the selling stage and are trying to find the right buyer to take over your business, an NDA is critical. Again, be as vague as you can for as long as you can, and for those candidates that make it through, ask them to sign an agreement so that you can move forward.
Cover All the Bases
Don’t rely solely on the NDA; it only keeps people from discussing your IP. Nor should you rely only on trademarks, patents and copyright; they only protect your ideas. A combination of the two will keep your trade secrets internal and protect your ideas so that no one can duplicate them.
In the event that you sell your company or your intellectual property, get an intellectual property assignment agreement to legally transfer the ownership of your IP to the new owner. You can use a template like this one, but it’s always a good idea to have a lawyer look it over to ensure that everything is done correctly. File the agreement with the patent office if you have a patent, to ensure that all parties are protected.