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Non-Disclosure

First a "heads up." A Non-Disclosure Agreement has ABSOLUTELY NOTHING to do with a "Disclosure Document." A Non-Disclosure Agreement (NDA) is a contractual relationship between you and another party. A Disclosure Document is a document which IT USED TO BE YOU COULD file with the US Patent and Trademark Office's NOW DEAD Disclosure Document Program whereby you disclose to them your invention for the purpose of having a 2 year record of when and what your idea was. For more info on this program see "Goodbye DD" at www.idearights.com/gbdd.htm.

Non-Disclosure agreements also go by other names such as Confidentiality Agreement and Confidential Disclosure Agreement which mean the same thing. Be aware though that some folks (often big companies) will try to get you to sign a Non-Confidentiality Agreement or similarly titled agreement. Be very aware when reading any such document, even NDAs, that the title is NOT controlling of what the actual document says. Read it very closely and if it says that YOU agree that the information you provide is not provided in confidence then it means the people you disclose your invention to can blab it anywhere freely--you just agreed to it. If you don't understand an agreement, or even if you think you do, it won't be a bad idea to pay an attorney to review it for you and spell out what its clauses mean and whether the attorney believes those clauses are in your best interests or not. You still have to make the sign or don't sign decision, and accept responsibility for it, yourself.

Also be aware that NDAs are governed by contract law and therefore there are different rules for them in different states (or countries for that matter). It is always a good idea to have an attorney in the country and state you want to have your NDA signed, and enforceable, in review your agreement before you use it though most generic ones should be fine. Also be aware that some states may prohibit some kinds of clauses at all in an NDA. California, for example, I don't believe will allow any kind of non-compete clause in an NDA. In others you would likely have to make the non-compete so limited it was no more than equivalent to whatever your patent claims are when it issues. Maybe some state will allow a non-compete as broad as the general idea of your invention--if it's not already known--but none will allow you to block someone or some firm working in the same field from earning their living. Finally, be aware that just because a non-disclosure does not include a clause that limits the time frame during which the secret must be kept it NEVER means forever. Three years would be a reasonable duration and 5 years about the maximum duration any state would support in the absence of powerful mitigating circumstances. Only true trade secrets can have enforceable "forever" non-disclosure agreements.

Having people sign non-disclosure agreements (see www.willitsell.com/geninfo.asp for examples) as you talk to them is not a bad idea but you need to balance practicality with risk. At the very least, record, in your inventor's notebook, the names of the people you talk to and the date and time and place that you talked to them. If you don't have to divulge secrets don't. If you need to divulge a secret and they won't sign, but will agree to confidentiality, you have to make a judgement call. If they won't sign and won't agree then I'd probably not divulge anything to them. Generally only thieves with low moral standards will "steal" an idea and then only if it looks like it will be easy to profit with no effort or investment so if that's the kind of people you hang out with keep your mouth shut!

For starters you might want to use the simple Alternate Non-Disclosure Agreement found at www.willitsell.com/altndisc.asp. In essence it says the party will keep your invention secret and not use their knowledge of it in any way either.

The preceding is about as simple as you can get. Remember though, all a signed non-disclosure form does is provide proof that someone represented that they would treat your idea/invention confidentially. It doesn't provide actual prevention of disclosure, only possible financial "protection," if the discloser can pay a judgement you get awarded to you, through the courts, after a disclosure--and after you go to the expense of a winning law suit.

A more thorough Non-Disclosure agreement would be this Non-Disclosure Agreement (www.willitsell.com/nondisc.asp) and will probably be more comfortable for most people because it provides for situations in which your disclosure isn't as new as you currently think. You should also notice in both sample agreements that there is an option for a sentence that grants all ownership of any improvements they make to you. It's a good idea to do this so that if they wind up contributing something that you haven't documented as your invention prior to talking to them and you want to and do claim in the patent application their contribution you can include them as a co-inventor (joint inventor).

Joint Inventor / Co-inventor

Joint inventorship, or co-inventorship, is a major discussion itself but just briefly it means that anyone that makes a contribution (usually of an actual structure or step) that is included in the claims section of a utility patent application must be included as an inventor on the patent application. It is not enough (usually) for someone else to just suggest some function that needs to be performed or some vague idea for which you then actually invent the structure that performs the function. It is best when specific questions regarding joint inventorship arise to present the facts and your documentation to a patent attorney or agent and let them make the determination. Mistakes on the application can be fixed but mistakes that get through to the issued patent can also result in your having an invalid patent.

It's best, of course, if you don't need to include their contribution in the claims. If you don't claim it, and you have ownership rights to it, you can still include it in the specification and drawings or leave it out and include it on your prototypes or products to prevent others from patenting it as an improvement. If you are not claiming it, it does not have to be shown as a "best mode" of your invention. (Your invention, by definition is what you are claiming.) You should also be aware that joint inventorship, in the absence of an ownership agreement, gives each named inventor on the patent equal ownership rights to make, sell, or use the invention without the consent of the other joint inventor and without paying ("accounting to") them either. In other words, only an agreement external to the patent grant between the co-inventing parties can spell out any limitations on what each co-inventor can do. My advice, avoid co-inventor situations to start with and if you do get into one be certain you have your own legal help.

In the end, extreme protective paranoia is not the answer. Hard work and diligent pursuit, as evidenced by a solid paper trail and supported by a detailed inventor's notebook, is. Getting a successful product to market should give you all the profits you need to defend yourself via litigation if it should be necessary. If it won't, you are probably proceeding with the wrong product idea.

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