When dealing with many outside parties including investors, manufacturers, suppliers, distributors, you should try to mitigate the risk of having your ideas stolen. There are several steps you can take to minimize this risk.
Patent your product
A patent will stop many people who may consider stealing your idea. It will also a very good legal tool if needed. Patents are also useful when negotiating with investors. The proposition for investing will be more inviting when you can tell investors you already have a patent, reducing legal costs.
Confidentiality Agreements
Non-Disclosure Agreements (NDA) are commonplace in today’s society. For some entrepreneurs, signing an NDA is a common practice with the parties they engage with. We use them to help protect products we manufacture from China.
A Non-Disclosure Agreement outlines the guidelines and rules of how information should be exchanged and protected. It is a contract through which the parties agree not to disclose information covered by the agreement. The written agreement creates a confidential relationship between the parties, typically to protect any type of confidential and proprietary information or trade secrets.
In the business world Non-Disclosure Agreements are generally used to share confidential information safely by regulating who can share information and the means it is transmitted. It is very important to read carefully through and understand any NDAs you are looking at signing.
Non-Disclosure Agreements are also known as:
Confidential Disclosure Agreement (CDA)
Confidential Agreement (CA)
Secrecy Agreement
Proprietary Information Agreement (PIA)
Purpose of the Non-Disclosure Agreements
The purpose of the Non-Disclosure Agreements should be stated. An agreement for hiring managers will look different than a Non-Disclosure Agreement signed between someone looking to have a product manufactured.
A good Non-Disclosure Agreement will state that the purpose is for “parties that wish to explore a business relationship” or “parties that wish to exchange confidential information”. Even better is being more specific, for example “The parties involved are considering a cooperative relationship to improve the website of party A with the software services of party B”. This expands on the backgrounds of the parties and gives details on the kind of information to be exchanged.
Parties Involved
The Non-Disclosure Agreement should list which parties are involved in the contract. This can be between two people, but if there are companies involved, they should be included as well.
Information transmitted
The contract should layout what type of information that is to be protected. Information that is common knowledge or in the public domain can’t be categorized as confidential.
Duration of the contract
Most Non-Disclosure Agreements are only written to last for a period of 3 to 5 years.
Non-Solicitation Clause
This is a clause which prevents employees of either company from selling secrets or files to other companies.
Not every piece of information shared between two parties is confidential, especially if it is in the public domain. There should be some way to easily identify what information you are sharing as confidential. Some Non-Disclosure Agreement state that all information shared between the parties should be treated as confidential, but that isn’t really practical. You can mark files shared as confidential, and that would suffice.
Exclusions to Confidential Information
Over the course of time some information may naturally lose its confidential status if it became available to the public domain. A thorough NDA will state that the obligation to keep such data confidential would cease if such a situation happened. The onus would be on the recipient to prove that the information is public domain and they weren’t the cause of it.
Ask for Non-Disclosure Agreements for Your Protection
Non-Disclosure Agreements are an effective way to protect information and assets between companies. You shouldn’t be afraid to ask for an NDA to be signed. Using non-disclosure agreements to protect your company and your products being manufactured protects your future.
Wenn Sie mit vielen externen Parteien, einschließlich Investoren, Herstellern, Lieferanten und Händlern, zu tun haben, sollten Sie versuchen, das Risiko des Diebstahls Ihrer Ideen zu minimieren. Es gibt mehrere Schritte, die Sie ergreifen können, um dieses Risiko zu minimieren.
