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Watch Your Mouth!

If you don't want to lose the rights to your idea, don't talk about it--without a nondisclosure agreement, that is.

With whom have you shared your great idea? Your best friend? Your spouse? A consultant or manufacturer? If you've told any of these people, watch out! If they didn't sign nondisclosure agreements, your loose lips may have sunk your ship to future fortune.

The laws regarding idea disclosure have become more defined over the years. Today, showing or telling someone your idea without proof that it was shared in confidence can be very risky. Lacking evidence to the contrary, the U.S. Patent and Trademark Office will consider that revelation a public disclosure and the start of your idea's one-year countdown: From the time you share your idea, you have one year to file a patent application (regular or provisional). If you don't, your idea will no longer be protected and you'll lose your rights to it. And if you had hopes of protecting your idea worldwide, forget it. Many foreign countries (such as Taiwan) require that your patent application be on file before any public disclosure is made.

That being said, there are some things you can do to protect yourself if you realize you disclosed your idea prematurely. First, you can run to everyone you've shared your idea with and tell them you shared it in confidence. As long as they haven't told anyone else and agree to hold the information in confidence, your idea will be protected. An even better solution is to have each person you shared your idea with sign a confidentiality or nondisclosure agreement.

What are these agreements? Confidentiality agreements, nondisclosure agreements (also called NDAs) and confidentiality disclosure agreements are all essentially the same thing: a contract between you and someone else that prohibits that person from sharing certain information except under specific terms outlined in the agreement.

These agreements come in many flavors, and therein lies the rub. If your agreement doesn't fit the intended situation, it could be worthless. "Poorly written and inappropriate NDAs are a big problem," says Robert M. Chiaviello Jr., an intellectual property attorney at Baker & Botts LLP in Dallas. "Addressing legal issues associated with do-it-yourself NDAs is an area where more and more patent attorneys are spending their time." The lesson to be learned: Don't assume one NDA will fit every situation.

Tomima Edmark, the woman famous for her Topsy Tail invention has now turned her creative talents to the competitive retail arena of intimate apparel, HerRoom and HisRoom.

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This article was originally published in the August 1999 print edition of Entrepreneur with the headline: Watch Your Mouth!.

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