One of the easiest ways an inventor can make money is by licensing their invention to other people or companies. However, doing so can prove risky as you may be sabotaging your rights to the invention. In other words, you increase the likelihood of your invention being copied or stolen when you continuously reveal information about it. So, if you decide to license your invention, make sure to protect it as much as you can.
Luckily, we have compiled the most effective ways to protect your invention below:
- File for a provisional patent as soon as possible (assuming your invention is patentable).
- Make potential customers sign NDAs, or Nondisclosure Agreements if you cannot patent your invention.
- Be cautious about what you disclose to others and establish trustworthy relationships with your customers.
Patent Your Invention
Assuming your invention is patentable, you should file a provisional patent application as soon as you can so that you can obtain patent protection. Even though your patent has not yet been granted, “patent pending” often deters people from stealing your ideas. Also, it is crucial to establish your patent rights, in general.
If you have the time and patience, many inventors can file patent applications to the U.S. Patent and Trademark Office (USPTO) themselves. Visit the website to find instructions on how to obtain patent protection or seek professional counsel for assistance.
Utilize Nondisclosure Agreements
Unfortunately, because many inventions cannot be patented, the best way to protect your invention is through nondisclosure agreements. NDAs are also known as disclosure agreements and confidentiality agreements. Either way, if a customer signs one of these documents and subsequently violates the terms, you have the right to pursue legal action for any damages lost by their breach of contract.
Your NDA must include:
- What is and isn’t confidential
Typically, NDAs spell out the confidential matter by considering it “trade secret.” It’s also equally important to note what isn’t confidential to avoid unnecessary burdens for both parties.
- Each party’s obligation to keep secret information
It is crucial to specify the standard by which a person must keep a secret. In other words, you must list how both parties can maintain confidentiality. For example, the NDA must outline how to handle transferring information with third parties or how the confidential information must be stored.
- The duration of the outlined obligations
Typically, this section of the NDA causes the most tension between both parties and is usually resolved with negotiations. Most commonly, NDAs last anywhere between 2 and 5 years.
- The consequences of a party’s breach of contract
You must consider what type of action will need to follow a person violating the terms outlined in the NDA. Depending on the invention, the location of jurisdiction, and personal preference, you may want to resolve conflict with arbitration or litigation. In the end, you should consider the worst-case scenario and create this section of the NDA accordingly.
If You Cannot Use a Nondisclosure Agreement
It is not uncommon for people to refuse to sign NDAs. In this case, you will need to apply some common sense and strategically determine who to divulge information to. Do not put yourself or your invention at risk by sharing your information freely. So, to best protect your invention, we encourage you to:
- Research your customers
If a person has a long history with litigation, you may want to avoid sharing confidential information with them. If they have no reason to make you question them, share your ideas but proceed with caution.
- Build confidential business relationships
Even if a business did not want to sign an NDA, they may still be willing to establish a more casual confidential relationship. Therefore, you will still have the right to consider a relationship confidential if:
- The customer you provided confidential information to asked you for it.
- You informed your customer that using your invention was considered a business proposition and required payment.
- You requested that the information remained confidential when disclosing it.
- The invention and information relating to it can be considered a trade secret (has commercial value unknown to competitors)
- Only reveal the basic idea.
You do not have to divulge the details of your invention. Instead, stick with your invention’s main functions and how it will make them money down the road. This includes keeping whatever components that make your invention unique to yourself. Unless a person has a solid, business-related reason to know your invention, it is best to keep it to yourself.
Stanzione & Associates, PLLC is an intellectual property law firm with over 30 years of experience protecting corporate entities, start-ups, and individual inventors. Stanzione & Associates, PLLC stands above other Intellectual Property law firms because of Mr. Stanzione’s extensive experience working at the United States Patent and Trademark Office (USPTO) as a supervisory level patent examiner. At Stanzione & Associates, PLLC, we have the insight and long-term relationships with the USPTO to work well with patent examiners to achieve quality patents.