What is a Non-Disclosure Agreement?

When you have an idea that is not protected that you want to show to a third party while still protecting the confidentiality of the information, you would use a non-disclosure agreement. This binds the other party to not disclose any information about your idea as per the contract, and that they will not copy your idea and compete against you.

Why use a Non-Disclosure Agreement?

Once you have told someone about your idea, you have only a year to file for a patent, after which you lose the right to ever file for a patent. A non-disclosure agreement protects you from this because the person you have told will be legally bound to not tell anyone else about it, hence it will remain private and out of the public domain.

Will a non-disclosure protect my idea?

While a non-disclosure does offer you protection, there is still the risk that the person you share your idea with will break the agreement, and although you can take legal action against the person, this can be costly and time-consuming. Make sure that the person you share your idea with is trustworthy and perhaps speak to a couple of people for references first, particularly if you don't know the person very well.

How else can I protect my idea?

Before sharing your idea with anyone, at least get a provisional patent application for your idea. A provisional patent describes the idea without making any particular claims about it. It should also describe all possible inventions that could arise from the original idea. A provisional patent is easier to file and doesn't require the same formality as a regular patent, which makes it more cost effective as well.

What if the Company I talk to refuses to sign the agreement?

A lot of companies and investors have policies against signing non-disclosure agreements. If this is the case you need to investigate further and make sure that they aren't already developing creating something similar, and perhaps will soon be your competition.

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