Originally published by Austin TX Business Law Blog.
How can I ensure a potential investor does not steal my idea?
If you’ve developed a great concept, you may now be considering raising capital or bringing in partners. An investor or a business partner may prove vital in bringing your concept from an idea to a fully executed business. However, pitching your novel idea to anyone else without first taking steps to protect it could lead to idea theft. Our Austin, Texas intellectual property law lawyers discuss some steps you should take before pitching your idea below.
Non-Disclosure Agreements
A non-disclosure (NDA) or confidentiality agreement is a legal contract between two parties. An NDA will inform the parties that confidential information is being disclosed and the parties must maintain confidentiality of said information. NDAs, if properly executed, are legally binding. Breach of an NDA could lead to litigation.
Before approaching others about your idea, you will want to have them sign an NDA prepared by your attorney. By using an NDA, you can disclose your idea without risk that the other party will reveal the idea to others or steal the idea for their own benefit. Your NDA should set out the precise monetary penalties that a violator will face. Enforcing an NDA can be complex, but it is often your best means of protecting your idea before making a pitch.
Intellectual Property Protections
In addition to an NDA, you may wish to consider seeking intellectual property protections for your idea or concept before revealing the idea to others. Depending on your idea or proposed product, you may be able to file for patent, copyright, or trademark protections. Filing for a patent can be costly and time consuming, but for a truly novel idea, obtaining a patent before approaching investors could be the best way to protect your concept. Trademarks and copyrights are more readily obtainable and where your brand name or an image comprises a critical part of your potential business, you should consider seeking these protections.
Contact an intellectual property law attorney for more assistance with protecting your new idea. Taking some early steps to protect your concept could prove essential in the long run towards maintaining the confidentiality of your idea.
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
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