If you’ve developed a potentially marketable invention, you are faced with a dilemma.
To make money from the invention, you must generally license the rights to it to another business, often a manufacturer or distributor.
But in pitching the invention to potential licensees, you run the risk of disclosing so much information that the invention might be stolen or no longer protected by law.
So how can you shop your invention around without jeopardizing your rights? If your invention potentially qualifies for a patent, it may be worth your while to file a provisional patent application ($80 for small companies) and obtain “patent pending” status.
However, if you determine that the invention is probably not patentable, the best way to protect yourself is to have prospective licensees sign a nondisclosure agreement (sometimes called a disclosure agreement or confidentiality agreement) before you disclose any secrets.
It’s always safest to get a prospective licensee to sign a nondisclosure agreement, but you may not always be able to convince them to do so. When that happens, you are left in a vulnerable position. If you disclose crucial information without the agreement, you risk losing your rights to the invention. If you don’t disclose it, you risk losing a business opportunity.
Photo by USPTO.
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