Startup Toolkit

Gregg Fairbrothers:  This is the art of entrepreneurial communication.  You need to talk convincingly about your idea in a way that gets people to buy in, without compromising potential intellectual property claims or company secrets.  Outright stealing doesn’t happen that often, but it can.  Everyone eventually learns how to strike a balance, telling enough but not too much.

1. Some first-time entrepreneurs are so paranoid about discussing their invention or ideas that they won’t say anything to anyone without signing a non-disclosure agreement. Unfortunately nothing labels you as inexperienced so quickly. Investors seldom if ever sign non-disclosure agreements to hear about an opportunity. Most people will react the same way. Any investor will tell you that you have to learn how to talk about your ideas without impairing your IP rights or putting yourself at risk of theft. Striking this balance is something all of us have to sort out for ourselves.
2. The fact is, idea theft happens, but not that often and hardly ever by customers, who are the people you most need to be talking to in the early stages. Being selective on the quality of people you deal with and talk to is the best defense against idea theft.
3. If potentially patentable ideas are involved, you have to pay careful attention to public disclosure and the statutory bar, which means at some point considering patent applications. This is a subject unto itself and you need to be knowledgeable. And with revisions in the patent law pending, it appears early filings will be more important than ever.
4. If you want to talk about your invention prior to making any patent filings, only make enabling disclosures to others after they have signed a non-disclosure agreement binding them to the protect confidentiality of what you tell them. To be effective, non-disclosure agreements must be legal agreements with defined statutory elements. They must:
• Include a promise by the receiver of information to:
• avoid unauthorized use or disclosure – use only as intended
• limit use and disclosure to parties identified in the agreement, or obtain written permission to disclose
• exercise appropriate care in preventing the same by others
• Describe what information is protected.  It’s a good practice to create a schedule or exhibit listing the shared information.
• Mark all documents ‘confidential,’ number and label them.
• Include a statement preserving your ownership of intellectual property rights, current and future.
• Include a reasonable term and expiration.
• Avoid ambiguity (e.g. verbal representations).