Watch Your Mouth!

"An NDA is only as good as the person signing it," says patent attorney N. Paul Friederichs III of Angenehm Law Firm Ltd. in Coon Rapids, Minnesota. "An NDA signed by a person with low integrity is of little value." Friederichs adds that inventors' risks are compounded because you can't monitor what the disclosee really does with the confidential information.

So keep your brainchild to yourself as long as possible. And when you reach the point where you must share your idea with those who will help you make or buy it, do some homework on the other party before disclosing any information. Get referrals from associates, check the Better Business Bureau for complaints, determine whether the company has been involved in lawsuits, and talk to current and former clients if possible. This won't eliminate your risk completely, but it's still the best way to avoid disreputable companies.

When you meet with the company's executives, ask for a card from everyone in the room; then at least you have some evidence that you met them. And write a thank-you note after the meeting. Be sure to include the place and date of your meeting, the people present and any follow-up actions mentioned. Make a copy for your files, then send it. This note can later serve as an uncontradicted record that you demonstrated your idea to the party.

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