Other than operating in a constant state of paranoia, how do California start-up companies keep a lid on confidential information? When company secrets leak, it can take an enormous and expensive legal effort to undo the damage. Beefing up security will minimize the chance of intellectual property theft.
The majority of a vulnerable start-up’s value may be its intellectual property. Patent, copyright or trademark infringement can devastate a business, before it has a chance to take root and grow.
Understand which assets require guarding and have protection under intellectual property laws. Patent defense is often a high-priority business concern. Patents keep others from manufacturing, copying or selling unique inventions, including a product or process to make a product.
Since patent ideas occur before government patents are issued, there’s a chance for an information breach before protection is in place. Non-disclosure agreements can help keep pre-patent confidences private.
Non-disclosure agreements bind third parties – usually employees but can be anyone connected to the patent process – to secrecy. The agreements must be thorough and tough enough to prevent leakage. Contracts should spell out the confidential information that cannot be shared and detail where and how long the agreement is effective.
Access restrictions to sensitive data and information should be included in an NDA.
It’s likely at least some of the information about a potential patent will be discussed with others, who do not sign non-disclosure contracts. It’s impractical to expect some third parties, like pre-patent investors or prospective customers, to sign an NDA.
Legal advisers suggest sharing a limited but “reasonable” amount of information with non-NDA parties. In other words, accomplish the business goal without giving away all the secrets to the invention.
Intellectual property attorneys know which patent defenses work and which ones are weak. A legal adviser will suggest ways to safeguard business assets, before a patent is issued and after you’ve achieved the right to have one.
Source: Entrepreneur, “How to Keep Your Startup's Secrets Private” No author given, Dec. 26, 2013