Confidentiality Agreements

"Please let me tell you my secret"

Inventors often want to test the waters by asking someone in industry to look at their idea and evaluate it's potential. They want to know if the company would license the invention. The inventor usually wants the manufacturer to sign an agreement saying that they will keep the idea secret and not use it without a license. This is called a "confidentiality agreement" or a "non-disclosure agreement." Inventors are surprised when the manufacturer not only declines their agreement, but asks them to sign one that seems to say just the opposite. A letter from a such a manufacturer could look like this:

Dear Mr. Inventor,

Thank you for contacting us about the possibility of submitting your idea for our review and consideration. We are willing to receive outside ideas, but it is our experience that most improvements are found to be old -- either in prior patents or publications, or in work by other companies or our own. We will only receive and evaluate such information with the following understanding:

We must be in the same position as any other member of the general public with respect to the subject matter submitted. In other words, we can only be held responsible for use of any submitted information to the extent that such use constitutes an infringement of a valid patent.

Our consideration of the idea submitted to us does not establish a confidential relationship nor does it place us in any position of trust with respect to you and we make no guarantee that the information submitted will be kept confidential.

WHAT?! This sounds like they are asking you to say it's "O.K." if they steal your idea or tell the world about it.

Consider the company's situation. They've been in business for a long time and they've heard it all. They have no reason to believe that what you're asking them to look at is anything new to them. They probably have thousands of employees all over the globe and no way to know whether one of them already thought of an idea like yours. If they sign your agreement, they may have to prove they didn't steal your idea just to keep working on something they already have.

This is very frustrating to the inventor. The only way you can get a company to look at your invention is to sign something that might let them steal it. And now you know that the company isn't being unreasonable. Some industries are much more willing that others to accept outside ideas. The toy industry gets many of it's ideas from outside the companies.

Also, it's quite different when you show your idea to a vendor or job shop that will be paid to make parts or assemblies for you. They are your suppliers and you are their customer. If they want your business, they will be willing to keep your secrets.

It's probably becoming clear by now that getting a manufacturer to pay you for your idea is no easy task. Manufacturers aren't sitting by the phone hoping inventors will call them with the next million dollar idea. As one experienced inventor remarked when asked if he was worried that someone would steal his idea, "Steal it? I wish I could get someone interested in stealing it. I can't even get them to look at it."

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Ron O'Connor, P.E.

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