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Protecting an Idea

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Who Should Definitely Sign NDAs?

Of course, all employees, collaborators, and contractors should sign NDAs. That is standard practice. But these are a few people you might not have thought of: Manufacturers, Engineering Consultants, and Testing Facilities Are you freaking kidding me? I cannot tell you how many entrepreneurs will get or try to get their mother, their patent attorney, and every venture capitalist (VC) they meet to sign their NDA – and then they do not require the person helping them manufacture their invention to sign the NDA. Your soccer mom, patent attorneys, and VCs usually do not have the equipment, contacts or desire to steal your idea and start competing against you. A contract manufacturer or engineering firm usually has ALL of the equipment and contacts necessary to make your product. That was the whole point of contacting them in the first place. Do not be fooled by the “free consultation.” Without a contract in place, they can easily steal your invention and start competing against you. Co-Founders, Partners, Co-Owners Most entrepreneurs require their employees to sign an NDA. But they do not think to have their co-founder, partner, or co-owner sign an NDA. The reasons for this range from “we’re such good…

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Who May NOT Be Willing to Sign an NDA?

Not everyone will or should sign an NDA (Non-Disclosure Agreement). Here are some groups of people that probably will not sign your NDA. Potential Investors Most potential investors will NOT sign NDAs during early investment discussions because they have so many businesses to meet with per week that it exposes them to tremendous liability. Instead, they will generally ask you to keep the confidential parts a secret. Most potential investors will only sign an NDA when performing due diligence for large, post-seed round investments. Asking a potential investor to sign an NDA at the beginning of most discussions instantly marks you as an amateur. Click here to read more in my previous post: What do I do if potential investors won't sign an NDA? Patent Attorneys or IP Attorneys Most IP attorneys I have spoken with, and I am one of them, will not sign your NDA or will do so at great reluctance. There is a reason for this. Our engagement letters are already superpowered NDAs. To put it mildly, our engagement letters have confidentiality provisions that are required by law and legal practice to go far beyond the confidentiality provisions of most NDAs. More importantly for us and…

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What do I do if potential investors won’t sign an NDA?

I talk all the time with investors who get annoyed when small businesses and startups try to get them to sign an NDA. Even asking potential investors to sign an NDA is an instant sign that you are a total newbie to fundraising. There is a reason for this. Most savvy investors will not sign a Non-Disclosure Agreement (NDA) or at least not early on. This is because an NDA is basically a hunting license for suing people. Does that sound harsh? "I allege that you disclosed my confidential information. Now pay your attorney a lot of money to prove you didn't!" The goal of a potential investor, especially an institutional investor, such as a venture capitalist, is to quickly determine if your business is worth investing in. It's a numbers game for them so they meet with lots of potential businesses. For them to sign everyone's NDA would expose them to massive and unnecessary risk, which defeats the whole purpose of them meeting with you in the first place. So how do you protect your intellectual property without an NDA? Do not tell them the recipe for your secret sauce! Imagine that you are opening a restaurant and you…

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The Truth About NDAs

As a patent attorney, I often talk to small businesses and startups who say something like: “What good is a patent against a large business? You have to pay to enforce them.” Then in the very next breath, they will mention that they are discussing their invention with someone, but it’s okay, because they have an NDA. You realize that you have to PAY to enforce an NDA, right? NDA stands for non-disclosure agreement and is also known as a confidentiality agreement. They are just a type of contract that is so commonly used that they are referred to by a three-letter acronym or TLA. NDAs are not self-enforcing. If someone breaches your NDA, you have to pay to sue the breaching party to enforce the NDA just like you would pay to enforce any contract, patent, trademark, copyright, or trade secret. NDAs have been in the news a lot lately because they are powerful tools for big businesses, politicians, and celebrities to silence people, such as former employees, because there is a mismatch in power. NDAs have become controversial because rich people and big businesses have more money to enforce the NDA than the former employees to complain about…

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Warning: Watch Out for Patent and Trademark Scams!

I am writing to tell you how to save money by avoiding patent and trademark scams. If you are interested in saving money or helping someone else save money. When you file a patent application or a trademark application, the information in your application will become publicly searchable. This is part of the tradeoff for obtaining intellectual property rights; they have to be publicly searchable so that the public and your competitors can avoid accidentally infringing on your property rights. Unfortunately, all of that publicly accessible information leads to scam artists and others sending “mock bills” in the hope that you will accidentally send them money (usually over $1,000). These fake invoices will look real because they will reference the name of your application, your name, your address, your title, your file numbers and on and on. However, if you are using a patent attorney or an Intellectual Property attorney (IP attorney) to obtain your patents or trademarks, then your IP attorney should be listed as your designated contact by the United States Patent and Trademark Office (USPTO). This designation means that ALL of your bills should come to you through your attorney or an organization that your attorney introduced…

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1590: Turning Your Ideas Into Assets And Avoiding Getting Sued Into Bankruptcy For Patent Infringement

New Podcast with William Childs on The Entrepreneur Way Listen now:   William Childs William Childs earned his doctorate in chemistry, then attended law school to become a patent attorney. But he didn’t stop there. William founded and runs a virtual IP law firm in Houston, TX, where he helps entrepreneurs turn their innovations and creativity into valuable property their business can own. Entrepreneurial Role Models: Dan Kennedy When business started difficulties overcame: “I had to decide since I was a virtual firm where in the US that I want to work. This is much more difficult than it sounds because when I would work in a law firm I would typically just go to work where the job was. But now I could work anywhere in the world and work virtually. So, like where in the world would I like to work? And I decided on Houston Texas. But I didn’t know anyone Houston and I had never been to Houston Texas. I just sort of did the analysis and realized that Houston was probably about the best place in the US for my particular business which it turned out by the way was a brilliant decision” Favorite Books:…

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Part 8: How to Patent an Idea: A Guide for Beginners

This is the last post in my series - How to Patent an Idea: A Guide for Beginners Thank you for taking the time to read my insights on how to understand patent claims. I hope this information was useful and helped to clear up some of the confusion that comes with pursuing a patent. Here is a quick summary of the main takeaways discussed throughout this series: Patents Only Protect Your Invention In Their Country of Origin. Only Issued Patents Can Be Used To Sue A Competitor. Only The Claims Of A Patent Protect Your Invention.Claims Are Usually Open-Ended: Make Sure That Your Claims Only Recite Essential Aspects Of Your Innovation. Patent Attorneys Are Claims Fundamentalists: Make Sure That Every Word Is Necessary And Not Overly Limiting. Challenge Every Word! Try To Envision All Variations Of Your Innovation And Ask Your Patent Attorney If Your Claim Will Cover That Variation. Find The Bottlenecks Created By Science, Your Application, Or Regulations, And Claim Them. It is up to you to ensure that your patent is valuable, and your ideas are well protected. If your current patent attorney doesn’t seem to have the time to help you prevent design around, Childs…

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Part 7: How To Prevent Design Around

You can listen to this blog below: How to Patent an Idea: A Guide for Beginners This is the seventh post in my series How to Patent an Idea: A Guide for Beginners. In the previous articles I’ve discussed how to understand patents, common types of claims, protecting your product or method, and many other topics. Hopefully by now you’re feeling a little more informed about the patent claim process. In this article we’ll discuss how to prevent design around. How Can I Prevent Design Around? The term “design around” is commonly used when referring to some minor change that allows a competitor to avoid infringing the claims of your patent. Depending on your technology, you may not be able to prevent all design around, however you can make it as hard as possible for your competitors to steal your invention. In exchange for disclosing your innovation to the public, the government will grant you a patent that allows you to sue others for using or selling your invention without first requesting permission. The purpose of the patent law system is to encourage the public disclosure of innovation, not to protect you from competition. This may seem like a subtle…

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Part 6: Protect Your Method with Method Claims

You can listen to this article below: How to Patent an Idea: A Guide for Beginners If you read my blog on understanding patents then you know that only the claim section of an issued patent can be used to sue for patent infringement. If you read my articles on how to protect your patent idea, and how a product claim can protect your product, then you’ve got a good foundation for reviewing claims. Now it’s time to discuss method claims, also referred to as process claims Generally, method claims are claims that recite one or more steps. They are typically used to protect methods of making a product, using a product, or providing a service. Method claims are usually considered much weaker than product claims because method claims can be difficult to enforce. Infringing Methods Are Harder To Detect Unless the method is being practiced in view of the public, the infringement of a method claim is more difficult to detect. The first step of any patent litigation is usually suspecting that a competitor is practicing your invention without your permission. Detecting an infringing product is usually pretty straight forward. It’s usually on the shelf right beside yours. And…

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Part 5: How A Product Claim Can Protect Your Product

This is the fifth post in the How to Patent an Idea: A Guide for Beginners series. You can listen to this blog below:   If you read part two in the series on understanding patents, then you know that only the claim section of issued patents can be used to sue for patent infringement. If you read the third post, How To Protect Your Idea, then you have a few tips for reading patent claims. Will My Patent Claims Protect My Product? There is no definitive way to guarantee that your claims draft will protect your innovation, especially given the constant evolution of patent law that can change the way claims are interpreted by the courts. To give you an example - the claims that you file in a patent application can be thought of as a starting point for negotiations with the U.S. Patent and Trademark Office (USPTO). As part of this negotiation the USPTO may require that claims be amended in a way that reduces the coverage of the original claims. Additionally, product claims are usually considered much stronger than process claims. One reason is that an infringing product is easier to detect when a competitor imports…

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