Non-disclosure agreements protect your ideas and inventions from being disclosed to the public. It, however, does not offer any proof of ownership for the concept or design. It may be exploited by other parties as there is no solid proof the Idea was yours. A patent, on the other hand, offers solid proof, enforceable by stiff penalties proof of ownership.
A patent is basically a right granted to an inventor for their inventions or ideas, by the federal government to help the inventor in excluding others from making, selling, or using the design for a specific period.
This system was designed to encourage inventors and innovators to come up with more innovative ideas and get credit for their work.
There are three patent categories:
- Utility Patents: this is one of the most sought after types of Patent. It is granted to new machines, chemicals, and processes.
- Design Patents: this type of Patent is usually issued to protect the uniqueness in appearance or design of manufactured objects.
- Plant patents: this type of license is granted for the invention and androgynous reproduction of new and distinct plant species.
Why a Patent Protects You More Than an NDA
A non-disclosure agreement is an agreement just like any other between two parties that are looking to share Confidential Information. At the same time, a Patent is a federal document providing proof of ownership of an idea.
An NDA only acknowledges the Agreement and recognizes the signature. Should the party decide to share the information with someone else without leaving a trail, you will not have any evidence to table before a court if your Idea is stolen.
A Patent will leave a trail leading back to you as the owner of the idea/invention. If any other person reproduces your Idea, you will have substantial evidence to the table before the court.
Determining what is Patentable: Basics
For any invention to be awarded a patent, it has to be both “novel” and “non-obvious.” A design is termed “novel” if it has a striking difference from other comparable inventions in one or more of its parts. The Idea of creation must not have been used publicly, sold, or patented by other inventors within a year of the date of filing an application.
Consequently, an invention is “non-obvious” if someone skilled in design considers it an unexpected or an astonishing development.
Examples of Patentable Items
Patentable items typically involve anything made by humans and all the processes involved in its making. Below are some of the patentable things
- Chemical formulas and processes
- Musical instruments
- Genetically engineered plants, animals, and bacteria.
Patent infringement occurs when without the authorization of the patent holder, another party sells, reproduces, uses, or makes a patented item. The patent holder may, in this case, decide to issue the infringing party with a cease or desist letter or even sue them for their activities.
The patent holder is required to open an infringement case within six years from the infringement date. Failure to which, the claim will be time-barred, and the infringement will be ratified.
Different Types of Patent Infringement
The various types of patent infringement include:
Direct infringement: this type of offense occurs when a product that is patented is manufactured without the consent of the patent holder.
Indirect infringement: this occurs when a party encourages or aids in infringing the Patent.
Contributory infringement: this type of offense occurs when a party supplies a direct infringer with a part that is under Patent.
Literal infringement: this occurs if there is direct communication between the words in the patent claims and the infringing device.
Patent Infringement Penalties
When a party is found guilty of a breach, then the court may rule that the patent holder be compensated for all the damages. This may include any lost profits the patent holder may have realized. The prevailing party, aside from damages, may also be entitled to expenses. These expenses may include court filings, attorney fees, and other related litigation expenses.
How to write Patent/Inventory Non-Disclosure Agreement
In this paragraph, fill in your name/company name (you, the inventor of the invention rights owner, are the Disclosing Party). The name of the Receiving Party, i.e., an individual or company you are looking to enter into the Agreement with (for instance, an invention agent or a potential manufacturer).
Definition of Confidential Information
In this section, define in detail what is to be considered confidential. All non-disclosure agreements must have a clear definition of what is to be deemed as Confidential or Proprietary Information.
Exclusion from Confidential Information
In this paragraph, define all the types of information that are not to be treated as confidential and are in no way covered by the Agreement. Usually, these types of information are based on trade laws or court decisions.
Obligations of Receiving Party
The Receiving Party is bound to making sure that the “Confidential Information” is kept as such and that they will only be allowed to reveal such information upon written consent from the Disclosing Party. You should also state that the Receiving Party shall return any materials obtained upon acknowledging this Agreement should the Disclosing Party request for such material in writing.
This clause provides the duration in which the Agreement shall remain valid. The Agreement should typically last for as long as the information is likely to remain a trade secret. In most cases, the agreements go for at least five years, but depending on the information to be covered, it is much shorter, even as little as three months.
No Intellectual Property Rights Granted
In this clause, make clear that you are not in any way granting the Receiving Party any ownership in your Confidential or Proprietary Information.
In this section, group all miscellaneous provision. Usually, they are bundled together at the end of an agreement. These provisions generally include:
- Relationships: This clause is added to disclaim any relations that are not stipulated in the Agreement.
- Severability: The severability clause provides that, in the event of a dispute and you wind up in a lawsuit over the Agreement and the court rules that a section/clause of the Agreement is invalid, that the part shall be ruled out. The rest of the Agreement will remain valid.
- Integration: This clause provides that both Parties in the Agreement acknowledge only the version of the Agreement they have signed and that any other statements made in the past are void.
- Waiver: This clause should make it clear that the failure to implement any rights provided in this Agreement shall not waive of any prior or subsequent rights.
- Injunctive Relief: This clause describes that one of the parties may seek to stop the other party in the Agreement from doing something that is against the Agreement. Injunctive relief is to be in addition to all the other remedies that are available to the Disclosing Party.
- Indemnity: The recipient of the information agrees to indemnify the Disclosing Party against any losses, damages claims, expenses incurred due to the breach of this Agreement.
- Attorney Fees and Expenses: This clause should categorically define what is to happen to the Attorney Fees and Expenses that may arise from any disputes in the Agreement. It should make clear that the prevailing party in the difference shall be granted the right to collect any attorney fees and any other expenses incurred from the conflict.
- Jurisdiction: This clause is meant to get each party to consent in advance to jurisdictions in one country or state. Both Parties in this Agreement, give up the right to sue or be sued anywhere else.
- Successors and Assigns: This clause bind any company that acquires any party to the rules and stipulated regulations of this Agreement.
- Signatures: Each party must designate someone with the authority to sign on their behalf. It is recommended that each party sign at least two copies and keep one to ensure that they both have the original signed Agreement.
Frequently Asked Questions
Patents are usually territorial. The exclusive rights are only applicable in the Country/Region in which the Patent has been filed and granted, with regards to the Laws of that Country or Region
As long as an idea is not publically known, then it can be patented. However, if it has been disclosed to the public by the inventor, then a one-year grace period may apply in some countries, such as the United States and Canada.