In business, there are numerous instances in which you have to share confidential information with another party. For example you have a business idea. In order to execute the idea you will have to share the idea with potential partners, investors or employees.
Startup companies with a new and profitable idea can only succeed if what they are working on remains under wraps. But the key to doing so safely is making sure that the other party is bound to respect the confidential information you provide them and not use it in a way that is detrimental for your business.
Inorder to keep a lid on the sensitive information, a non-disclosure agreement, or NDA, alternatively referred to as confidentiality agreements (CA), confidentiality statements, or confidentiality clauses is signed between two parties.
A Non-Disclosure Agreement is typically put to use while disclosing confidential information to potential investors, creditors, clients, or suppliers. Some people might not like the idea of signing a non-disclosure agreement saying “Don’t you trust me?” But without such a signed agreement, any information disclosed in trust can be used for malicious purposes or be made public accidentally. NDA is a promise between two or more parties that the information conveyed will be maintained in secrecy.
The confidentiality of the information is maintained for a specified period of time as mentioned in the agreement. But once the information is made public, that loses it’s “confidentiality” people will be free to disclose the information.
Types of Non-Disclosure Agreements:
The specific content of each Non-disclaimer agreement is unique as it will relate to details of specific information, proprietary data involved and what is being discussed. In general there are two types of non-disclosure agreements.
Unilateral Non-disclosure agreement: A unilateral agreement binds only one party to the agreement for example a company signs a unilateral non-disclosure agreement with an employee. Employee agrees not to disclose or reveal confidential information learnt while on the job. The majority of NDAs fall under these category and are intended to protect a business trade secret. Researchers and professors at research universities or at R&D department in the private sector are at times required to sign an NDA before they carry out research with the business or university that supports them.
Mutual non-disclosure agreement: A mutual non-disclosure agreement is typically executed between two parties exploring a possible business arrangement or a joint venture or some other possible merger that might have a mutual benefit to both parties.
Advice to budding Entrepreneurs For Protecting a Business Idea
Got a brilliant Idea? Already daydreaming about a groundbreaking business and becoming the next Bill Gates? But what if someone comes up with something similar?
Running a successful business is not a solo sport. We work with and through other people.
In order to get off to a flying start, an entrepreneur needs investors, vendors, employees and may be a partner or a mentor. Thus eventually you have to discuss your idea with the masses. But what if someone steals your idea?
Fear of getting the idea stolen is one fear that stops a number of people from starting a new business.
An individual with a fear of getting the idea stolen will move forward so slowly and cautiously that someone else who already thought of the same idea will move ahead. So how do you market your idea to the masses without having someone rip you off?
Here are certain things all budding entrepreneurs should consider while protecting a business idea.
1.Yes, a patent can help you remain competitive in your field and give you an edge on your rivals.
Technically ideas themselves cannot be patented. When you take an idea and turn it into an invention or process that meets specific criteria and requirements, it can be patented. But make sure your invention fulfills all the requirements to apply for a patent.
2. Consider the money involved in filing a patent.
Patent filing requires money. Patents have filing fees and maintenance fees over the life of the patent and a large amount of money is required for the defence of the patent. If your idea fulfills all the requirements to apply for a patent, and there are no other previously filed patents, then it’s time to apply for your patent. But before filing a patent make sure that the patent generates enough profit to justify the expenses associated with its filing.
It is advisable to seek legal counsel and advice before filing a patent and get patent professional involved for writing and filing patent.
3. When should you consider a Non-Disclosure Agreement (NDA) ?
There is no patent or copyright for an idea. If you really feel you’re onto something new and want to discuss it with some people, potential co-founders and contractors before you have been able to build it. In such cases, it is advisable to sign a Non-Disclosure Agreement (NDA).
A non-disclosure agreement (NDA) is a confidentiality contract between two parties.
According to the non-disclosure agreement (NDA), one party agrees with the other that if the latter party discloses to the former its idea and other confidential information, then the former will maintain its confidentiality for a specified period of time. If the former party were to breach this agreement, causing loss to the disclosure, then the disclosure has a remedy in being able to sue for breach of contract.
True, some people might not like the idea saying “Don’t you trust me?”, but there’s value in your invention only if you own and protect your idea. Moreover the agreement will also demonstrate the individual’s seriousness in commercialising the idea.
Putting copyright symbols by your business plan or logo is a good idea even if you aren’t sure you’ll ever go through the trouble of filing a copyright or a trademark.
It’s like putting a yard sign or a sticker that says your house is protected by a security system even if it’s not.
When people will see that copyright symbol next to your work, they won’t take the chance to burglarize.
5. Implementation of idea.
Ideas alone are not worth that much — it’s how they are implemented.
It is important to implement that idea into sustainable innovation.
“What makes the difference for successful businesses is not the idea alone. It’s the implementation of the idea, a commitment to delivering the products, services or information on a daily basis, that makes the difference.
It takes a lot of energy to run a business, It’s hard to get things done and it takes a lot of discipline. Also there’s no guarantee that any business will be successful. If you have an idea for a product, service or business, beat the odds and use your passion and energy, to figure out how to make it profitable.
At Tech Corp International Strategist (TCIS), we help Startups to Raise Funds & Assist Foreign Companies to find Right Business Partner in India. We assist enterprises to enter INDIA and find RIGHT Angels, and Venture Capitals in Malaysia, Singapore, US, UK, Japan and India. We believe that for protecting your innovation in India, your startup idea and our intellect is the perfect combination. Every business has a #strategy. We at TCIS facilitate the process of identifying Key issues and help amplify business goals of any business (short term goals and long term goals). Everything is simple we tend to complicate and use heavy words to prove our point.