Most inventors know that a healthy amount of paranoia goes a long way when dealing with an idea or invention. Ideas cannot be protected, so if you tell others they are free to use them unless they have signed an agreement saying they will pay you if they use your idea — good luck with that!
Inventions can be patented, but if you start telling others about your invention they could make and use your invention, which has immediate negative consequences for the patenting of the invention. Outside the United States many, if not most, countries follow an absolute novelty standard, which means you need a patent application on file before any public activity associated with the invention. Since March 16, 2013, the United States is also a first inventor to file jurisdiction. There are exceptions, but extraordinarily narrow exceptions. So narrow are the exceptions to first inventor to file prevails that they are hardly worth mentioning and not at all worth relying upon. So you really need to consider the law as rather black and white — file first before doing anything public.
Of course, the advice about filing first, which everyone should follow, begs the question about exactly how much paranoia is too much paranoia? After all, many inventors are going to need assistance from someone in order to bring their invention into being.
First, inventors need to know who can be trusted with your invention, and the short answer is not many people. This prompts many to attempt to secure a signed confidentiality agreement prior to disclosing their invention. By all means do try and obtain a confidentiality agreement if possible, we have free sample confidentiality agreements here on IPWatchdog.com that you can use at your discretion. Having said this, don’t be surprised if the other party does not want to sign. This is because prior to the signing of the confidentiality agreement no liability existed for the party receiving the information. After the signing of the agreement liability exists and there is no guarantee that anything of value has been conveyed in exchange, but liability has been created.
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For example, Sam invents a new and improved fly swatter. The fly swatter is virtually idiot proof and anyone can use it to kill flies no matter how uncoordinated. Sam wants to talk to Bob about possibly investing or partnering in the endeavor, and before Sam tells Bob anything he wants a signed confidentiality agreement. Bob has no idea what he is about to learn from Sam, maybe it is good, maybe it is bad, maybe he already knows the information. If Bob signs a confidentiality agreement he is immediately opening himself up to liability because he has promised to keep Sam’s information secret. If Bob already knew about Sam’s improvement to the fly swatter the confidentiality agreement he signed will almost certainly say he doesn’t have to treat Sam’s disclosure as confidential. But if you were Sam what would you think if 6 months later Bob starts selling a fly swatter that looks remarkably like yours? Sam will think Bob stole it from him and maybe litigation will ensue.
The above story is but one example of what can, and frequently does, happen. Inventors frequently think what they have is so unique no one else could have ever come up with the invention without stealing it, but that is really rather naive. That is not to say that taking an invention or idea never happens, but there are plenty of creative people who can and do come up with nearly identical inventions. Just hire a professional to do a patent search on your invention and that will become clear. While you as an inventor may not be able to find any relevant prior art, a patent attorney or professional searcher will undoubtedly be able to locate numerous references that are at least related in one way or another. This doesn’t mean you shouldn’t do your own patent search first, you should, but professionals who work in this space every day will find much more. Only the most pioneering of inventions will not have prior art, and most patent professionals will go their entire career never having worked on one of those types of inventions. They are very rare.
Returning to our example, if Bob is an investor he has likely been pitched by many inventors, so it stands to reason that eventually two inventors will have at least plausibly similar inventions. Thus, getting an individual to sign a confidentiality agreement can be quite difficult. Sadly, one of the ploys used to gain confidence of inventors is the promise to sign a confidentiality agreement. But those who operate on the shady side of the industry aren’t interested in taking your invention, rather they plan on taking your money by selling you high priced services for an invention that might not be patentable or only capable of receiving extremely narrow patent coverage. Their play is not to steal your invention, but rather to make you think it is the best thing since sliced bread so you hire them to do a variety of different types of work for a fee.
Just because getting a confidentiality agreement is difficult doesn’t mean that you shouldn’t try. There are those out there that are used to signing confidentiality agreements, such as manufacturers and engineers who you might need to work with to create engineering drawings or a prototype. Whenever you are showing your invention to someone within your industry or to those who would have the technical knowledge and ability to move forward with your invention without you, a confidentiality agreement is both essential and more likely to be obtained. Just don’t expect investors or potential licensees to be all that interested in signing a confidentiality agreement , at least at first. However, if they like what they hear it is not unheard of that at some point they might be willing to sign a confidentiality agreement. So there is many times a delicate dance where you show a little to entice the reluctant signer of the confidentiality agreement. As interest builds they may become more willing to sign.
So what do you do? Many inventors will seek to obtain some kind of patent protection so they can stake their claim to their invention. This is a good strategy because when you file a patent application you are articulating your invention and getting on record with a filing date that cannot be taken away from you with respect to whatever is in your patent application. A provisional patent application can be a great first step particularly if you are going to need some assistance later to develop your invention because whatever is disclosed in the application is protected as your invention as of the filing date, assuming of course you ultimately get patent claims issued. It is also a good first step because you do not need a confidentiality agreement when dealing with a patent agent or patent attorney because the law already requires that information learned from clients or even prospective clients must remain confidential. So even if you just seek the advice of a patent attorney or patent agent and never wind up hiring them they are legally required to keep what you tell them confidential. That is the law and it is much stronger than any confidentiality agreement you could ever have them sign. This is true because any confidentiality agreement will say that if the information becomes public the signer is no longer obligated to keep the information secret. There is no such “out clause” in the attorney-client privilege. What you tell a patent attorney or patent agent about your invention is confidential and will remain confidential even if no representation relationship ever is undertaken. See Confidentiality Pledge.
After you have a patent application on file, even if it is a provisional patent application, the need to obtain a confidentiality agreement lessens, but it does not go away. The short answer is that you are always better off getting a confidentiality agreement signed whenever possible. The only caveat is that you do not need a confidentiality agreement when you are speaking with an attorney, and most attorneys simply do not sign confidentiality agreements and are invariably scared away from representing those who ask for a signed confidentiality agreement. It is simply urban legend that attorneys steal inventions. There has never been a single provable case of an attorney stealing an invention ever. It simply doesn’t happen and if you are caught up on an attorney signing a confidentiality agreement finding reputable assistance will likely be quite difficult. Sure, you can find a patent attorney here and a patent agent there that will sign a confidentiality agreement, but attorneys at the biggest, best and most high quality firms simply don’t sign confidentiality agreements because they are unnecessary. Further, those who worry about attorneys stealing inventions despite the legal requirements imposing attorney-client confidentiality are routinely viewed as probable difficult clients that are likely to be problematic and perhaps even sue the attorney. Said bluntly, I don’t need the hassle of representing someone whose first contact with me is to try and set up a lawsuit against me should something go wrong. Don’t present as a prima dona when seeking legal assistance, at least not if you want to obtain high quality representation.
Back to the question at hand regarding the need for a confidentiality agreement post filing of a patent application. It is important to understand that no exclusive rights will attach to your invention unless and until a patent is actually awarded by the Patent Office. Filing a patent application, whether a provisional patent application or a nonprovisional patent application, is an important first step that works to legally define the scope of your invention, but no rights attach at the time of filing.
After you file a patent application you can use the coveted terms “patent pending” and this should scare away many, if not all, potential competitors. Typically no one wants to spend the time, money and energy associated with making and selling a product when a patent could pop up and be used to shut down the operation. Having said this, there is no reason that others could not use, make and sell your invention prior to the issuance of a patent. Additionally, if you file a patent application and inadvertently do not include as much description as is required and should be present you could significantly harm yourself by telling others about your invention without a confidentiality agreement in place. For example, if you tell someone and they engage in some activities, such as but not limited to writing about your invention, and you later realize that the original application was faulty you may not be able to file a new, updated application. This is particularly a concern if you filed a provisional patent application on your own, or used a bargain basement attorney.
As mentioned above, you need to realize that many people are just not going to sign confidentiality agreements. This is not necessarily because they plan on stealing your invention, but rather in many cases because if they sign they are creating liability for themselves. This holds true even after you have filed a patent application.
You can, however, with some level of assurance show interested individuals your patent application once you have filed the application. You are still better getting a confidentiality agreement if you can, but at least you have defined your invention and secured your priority date, which relates to whatever is present in the disclosure at the time you filed the patent application. So even if the person you are showing would be inclined to do something nefarious like rush to the Patent Office with your invention they could never obtain a priority date as early as the one you have. Of course, the sufficiency and comprehensiveness of your disclosure is critical. Don’t skimp on your first patent application ever! You cannot update your application unless you file a new application and if you leave something out it is out and not yours. Even if you file a second or subsequent patent application that which was left out of the first application gets a new priority date. In the patent world having the earliest priority date is best.
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If you are apprehensive about providing a copy of your patent application after filing without a confidentiality agreement perhaps you should consider providing an executive summary of the invention, together with a few of the illustrations you filed. This would give the them something to evaluate substantively, but not the core description of your invention. This could entice someone who was otherwise unwilling to sign a confidentiality agreement into signing. It may not work that way, but you are still holding secret the specific details about your invention while trying to see if the other party really has interest.
Despite these risks it is at least somewhat common to show serious investors the patent application you have on file. They might not want to actually see the application and instead might just ask you questions about it, but some will want to at least take a look to thumb through so they can get a sense about whether it is a quality patent application. Others might want to talk to your patent attorney, or even see a patent search report or patentability opinion. But always remember that investors, particularly those you will most want to talk to, are notorious for not wanting to sign confidentiality agreements because they can talk to so many different inventors that they are bound to come across someone who could think that their idea was stolen. That is their concern and understanding that can allow you or your attorney to devise strategies to protect your confidential information while moving forward on some level.
So the moral of the story is get a confidentiality agreement signed whenever possible, but understand that to get the help of a reputable professional you may have to live with not having one. If you cannot get a confidentiality agreement signed you absolutely must file a patent application first, and you really should have professional help doing that if you can afford it. If you need to do the preliminary patent work on your own due to cost constraints, take a look at the Invent + Patent System, which helps individuals create and file a provisional patent application.