Entrepreneur magazine has observed that it is only natural for one to fear that their idea for a new product or service might be stolen. However, you often cannot turn your vision into reality without enlisting the aid and assistance of others. For example, you may need to discuss your idea with investors or lenders in order to generate sufficient funding for your new product or service. Similarly, you might need to ask someone with special expertise to evaluate your product or service. Moreover, at some point, you will almost certainly be forced to "collaborate with a manufacturer or distributor" if you intend to produce and market a product.
While a patent can give you protection against having your idea stolen, getting a patent approved can take time that you may not have if you want to get your product to market quickly. Inc. magazine suggests that, if your company is going to need to share confidential information with third parties, it should invest in a well-written nondisclosure agreement.
According to the Entrepreneurship Life website, a nondisclosure agreement (NDA) is a legal contract between two parties designed to protect confidential material, knowledge or information from disclosure to others. An NDA is commonly used when two companies (or individuals) are considering doing business but need to share certain confidential information in order to evaluate the potential business relationship.
If an NDA has been signed, and information is revealed by one of the contracting parties in violation of the NDA, the injured party would have a right to pursue injunctive relief and/or a breach of contract action. Entrepreneurship Life observes that nondisclosure agreements are extremely important for all types of business deals. They are especially useful for small businesses and start-ups which will probably need to outsource a lot of work to contractors or freelancers.
Forbes magazine notes that, in addition to using a NDA, there are several steps businesses can take to help prevent theft when they share their ideas with others. First and foremost is to avoid revealing too much information. One of the very best ways to protect your idea is to only reveal to others what is absolutely necessary. If you are "pitching an idea" to a potential client or customer, give only the details absolutely necessary to convey a general sense of the idea for a new product or service as opposed to sharing specific details of how a product or service will work.
Secondly, apply for a provisional patent. During the process of shopping your idea around, a provisional patent can protect that idea for the first year. Third, research the recipients of your idea. Regardless of whether you are revealing an idea to a contractor, a possible customer or a potential investor, investigate that person before you talk to them in detail. The Internet makes it relatively easy to determine someone's business reputation. Fourth, follow your gut instincts when talking to anyone about your new idea. If you sense that the person you are talking to is grilling you hard in order to find out exactly how your new product or service will work, you may want to exercise great caution in what you tell that person.
Seeking legal advice
If you believe that your business could benefit from having a nondisclosure agreement prepared, you should contact a Texas attorney with experience in drafting customized NDAs that meet a particular businesses' needs.