Whether you’re starting a new business or launching a new product you want to brainstorm your concept and get the benefit of other people’s advice. At the same time, you don’t want them to walk away with your ideas and beat you to the market. What can you say without saying too much?
It’s always a good idea to limit your brainstorming to an inner circle you can trust and to share information on a need to know basis. You’ll also want to let them know that you consider the conversation and the information you’re sharing “confidential.” Hopefully they will respect and honor your request. But if the verbal promise is broken, there may not be much you can do about it.
The better course of action is to enter into a written confidentiality, or non-disclosure, agreement. Small business owners are sometimes afraid that asking for a contract is “too legal,” or formal. Before you give into that sentiment you need to remember that you have a business to run and protect. You wouldn’t leave your office unlocked and wide open. Why would you do that with your ideas – especially if those ideas are patentable.
In the United States patent applications must be filed within one year of product commercialization or the information becoming public. If you don’t have a confidentiality agreement in place the clock is ticking and the deadline for filing could easily come and go while you’re busy working on other things. Having a written agreement in place stops the clock. It gives you time to experiment, explore, and evaluate at your pace.
Some people are afraid to ask for a confidentiality agreement for fear that they’ll offend a business prospect or colleague. But savvy owners know that their business ideas are trade secrets and that trade secrets are valuable assets worth protecting.
A confidentiality agreement is the equivalent of the “cone of silence.” The written contract gives the promise of confidentiality some teeth. Information covered by the agreement must stay inside the cone. It can only be used to further the purpose of the agreement. Any unpermitted use is a breach of contract for which you have legal recourse. As a result, you’ll be able to speak confidently about your subject and without fear of saying too much.
A well crafted confidentiality agreement can give you peace of mind and let you focus on helping more customers and growing your business.