Keeping your designs confidential

Revealing one's secrets to a potential commercial developer is always a tense business. Patents do give protection, but unpatentable 'know-how' is often more valuable. On the one hand, the fact that the meeting is taking place means that the potential licensees are interested. But on the other hand, revealing even some of one's intellectual property to a party in a position to exploit it is risky. For this reason, disclosure should only be made after the signing of some kind of a confidentiality agreement. Experienced entrepreneur and European licensing practitioner Harry Cole advises, "If you don't use confidentiality agreements when disclosing your ideas, it is extremely difficult to prove in a court of law, that the disclosure you made placed the other party under any obligation of confidence" Agreements available off the Internet, do not, in Harry's "Humble" opinion, contain enough key elements to provide adequate safeguards to either party. On the other hand, he says, "It would be almost impossible to cover every eventuality, otherwise inventors would end up having to persuade companies to sign a 20 page document, which would be absurd, impractical and expensive beyond the reach of most clients pockets." He advises that a 'standard' confidentiality agreement should contain nine elements. First should be a statement by the submitter that he or she is the creator or owns the title to the subject matter and that the disclosure does not trespass on the rights of third parties. There should be a statement to the effect that the receiver shall not assume any right to a license to exploit the information received. The receiver should not make any disclosure to employees or to third particles unless under a binder of confidentiality obtained by the other party. Neither party should release any press statement without the written consent of the other party. There should be a provision that the agreement is binding on heirs and assigns. The receiving party has to notify the other if they are already in prior possession of the information or if the information is already in the public domain. The agreement may specify how long the information is to be kept confidential. (It should be noted that unless specified, obligations of confidence are automatically terminated after five years). There should be an on termination clause relating to obligations to return information and/or prototypes. There should be a mutual undertaking by the submitter not to disclose any confidential information relating to business practices or future developments planned by the party signing the non disclosure. As Harry says, "Why should any company keep your secret, if you don't undertake to keep theirs?" Finally, there should be a clause that in the event of a particular clause being unenforceable in another country, it will not affect the validity of the whole document and the agreement shall remain enforceable. Even if the agreement is perfect, Harry advises, "It is not uncommon for lawyers acting for the other part, to exercise a kind of unwarranted superiority and request, or demand, depending upon their mood, that the document must contain (or delete) such and such a clause, before they can advise their clients to sign. "OK" pander to their vanity - if it means both clients can now get on with the matter in hand, but always look closely at any amendments or disclaimers before signing." More information from harry.cole@jerseymail.co.uk. Quote: "It would be almost impossible to cover every eventuality, otherwise inventors would end up having to persuade companies to sign a 20 page document, which would be absurd, impractical and expensive beyond the reach of most clients pockets."