How an NDA Can Protect Your Invention - Free Enterprise
Free Enterprise - The FindLaw Small Business Law Blog

How an NDA Can Protect Your Invention

How serious is an NDA? Some say it really doesn't have much clout. Others will swear by a non-disclosure agreement.

It's a contract signed between two parties, where one party agrees not to disclose certain trade secrets, inside information and other things he or she may come to learn of during the course of the relationship between the parties.

Many resort to NDAs as a method of protecting their inventions of business secrets. Is the NDA, even the most iron-clad NDA, the best way to protect an invention or idea?

Not necessarily.

A patent is usually the best way to protect an idea. But obtaining a patent is difficult and time consuming. And it might require some strong expertise in patent law.

If an idea is not patentable or if the patent road is too arduous, then an NDA could work to protect the invention. But don't be fooled by the mere presence of having an NDA.

An NDA won't always stop someone from disclosing the idea. Of course, an NDA can frighten people into staying quiet.

A well drafted NDA will lay out the ideas and concepts that are to be protected with specificity. Of course, an NDA can be more general than that and apply to any and all trade secrets, processes and concepts learned when the parties were in the relationship.

An NDA should also state the length of the obligations and the punishment for breaching the obligations.

The existence of an NDA still won't scare everyone from violating its provisions. If and when the terms in the NDA are violated, the contract might have to go to court.

The problem with NDAs is that they can be taken apart by a court for a variety of reasons. Even the most seemingly iron-clad contract might not hold up in court.

So in short, if you have to protect your idea or invention, consider getting a patent, first.

If that's not an option, then look for a good attorney to draft your NDA. An NDA needs to be well drafted. It's your first line of defense, but don't consider it your only line of defense.

Related Resources: