A Start-up’s Dilemma: Confidential Information

IP Questions

In the early stages of any new product or business venture there are more questions than answers. Some of the most important ones involve the management of intellectual property and here are a few examples. “How can I get information that will move my project forward without the risk of someone stealing my idea.” “How can I share information without giving away secrets?” “Can I discuss my idea for early market and technical research before deciding to file a patent application?”

Since there is a lot that could be said about information management, this article is limited to a few basic concepts to apply early in any innovation process. Your biggest competitors gather information all of the time, but they know how to do it without giving away information about their new products or business ventures. You can be as smart as they are about innovation.

“How can I get information that will move my project forward without the risk of someone stealing my idea.”

First, all information should be considered confidential until you know otherwise. For example, you may learn by your own research that parts of your new product are already available. This means that they are in the public domain and don’t need to be considered confidential. If you want to get details about their manufacturing, you can use those examples to request technical information or get cost estimates. The key is to ask general questions about materials, manufacturing, processes without telling anyone what the information will be used for.  Use similar products as examples, instead of your new product. Remember that if the combination of different parts is new, that information and the final product should be kept confidential. 

“How can I share information without giving away secrets?”

Again, use known examples or similar products. For example, if you are building a business to make gluten free products, don’t give anyone the exact composition or the recipe. The secret is the product and the recipes, not the business. If you have a product that has a lot of moving parts you can generally talk about what it does, especially if the key parts are hidden from view. The goal is to keep secret the parts and how they work together.  A good rule of thumb is to remember that the invention is what it is, not what it does.

“Can I discuss my idea for early market and technical research before deciding to file a patent application?” 

For most products that could be reverse engineered and made by your competitor, patent protection should be considered. Early patent research will help determine whether that is a feasible option. To get the best research results, you need to provide all of the details and in this case it is best to use a “Confidential Disclosure Agreement” (CDA) or an “Non-disclosure Agreement” (NDA) to ensure that the person receiving the information knows that you are serious about keeping your invention secret prior to filing a patent application.  Agreements should be used whenever details need to be shared (if you can’t speak in general terms), such when you go to someone to make a prototype. Know the person you are sharing with and the risks involved. The risk when you share information with your family is not the same as when you share with a major manufacturer. Make a conscious choice of who you will share with and how. 

Ideally, you want to establish an intellectual property strategy early in your product or new business venture. If it is a new product that can be reverse engineered by your competitors, you should consider patent protection. If the product cannot be reverse engineered or it is a process that can be kept secret, you should have a strategy for protecting your trade secrets (recipes, processes in a factory, some business processes, etc.). Copyright should be considered for computer code, literature, drama, music, art, films, other audiovisual works, architecture and other creative works. Trademarks identify the origin of your products and services, and help you build your brand.

Yes, the world of intellectual property is complicated. It has a lot of rules that if followed provide important competitive advantages, but if not followed can have serious consequences. Each business venture is different and there is no “one size fits all” approach when it comes to developing and protecting your intellectual assets. Business advisers with limited experience in intellectual property may not understand all of the options or legal implications. You need a strategy tailored to your project and an experienced intellectual property professional can help you. Once you have an intellectual property strategy in place, your business research and development strategy will move ahead much more efficiently and cost-effectively. 

Ellen Krabbe is founder and president of Fresco Services LLC, an intellectual property firm promoting innovation by providing world-class patent research, strategies and other intellectual property services.

Leave a Reply

Your email address will not be published. Required fields are marked *

Solve : *
21 × 1 =