Need to know: Confidentiality agreements
Article Date: Mar 23 2005You have an invention that will change the world, but you need outside help to produce it. How do you negotiate with prospective partners or investors without revealing the secrets of your invention and invalidating any patent application?
One answer is to put together a confidential disclosure agreement (CDA), but the process can be complex. To help make this easier, the Patent Office has issued guidance on how and when to draft a CDA.
A CDA (also known as a non-disclosure agreement) is a legally-binding document detailing the terms on which secret information is shared.
‘Inventors are concerned that their idea might get 'ripped off', so they need clear advice on how to safely disclose their invention,’ says Andy Bartlett, Innovation Champion at the Patent Office. ‘There is no 'one-size-fits-all' CDA though. Each one must be tailored to a particular invention or business relationship.’
As a cautionary tale, the Patent Office cites the case of Dr Palmaz and his revolutionary medical device, the Stent, which prevents artery walls collapsing. The doctor unsuccessfully sued a company for patent infringement because he had revealed details of his invention to a ‘handful of experts when looking for investment’. A CDA could have saved a lot of trouble.
However, even if a CDA has been signed, it is null and void if confidential documents (no matter how much they have "CONFIDENTIAL" stamped on them) are left lying around or circulated around your firm, as it is then considered to be in the public domain.
When to use a CDA
- If you do not have enough details to lodge a patent application.
- If you want to wait until you have further developed the technology.
- When you need to speak to another party to get advice on technology. A CDA can enable you to do this without invalidating your application.
