NDA vs Patents
As learned this week, it is important to protect our ideas and inventions and to do so in the appropriate legal manner. Part of the lesson discussed Non-disclosure agreements, or contracts, and how they can help protect our ideas.
Based on what we know about patents, is an NDA a substitute for a patent? What is the difference between the two, and when is either one needed? One could say that both working together can give you the ultimate protection, but there should be cases when one isn't necessary.
The thing is that what you may be working on (as covered by an NDA) may not be sufficient to be apply for a patent. You may in fact be needing work or studies done by a contractor or collaborator to have sufficient data or evidence to make the idea patentable or defendable before a patent agency. Thus, an NDA is almost always necessary prior to development of a product. This is what I have gathered from my industrial experience.
The difference is that a patent is a federal document proving ownership of an idea, and an NDA is simply a contract between two people. So in other words NDA’s only recognize the signatures on the contract, whereas patents provide proof that you own the idea entirely. So, if you sign an idea with a coworker, and develop this product, but then the coworker tells his other friend about it who also decides to build the similar product, you would not be able to sue the coworkers friend because there is no paper trail between you and the friend. In the court of law, a patent certainly holds more weight than an NDA.
An NDA is a contract that is a matter of state law, where a patent is a federal document, and therefore, interpreted uniformly throughout the country. If you sign a NDA with a company then they are obliged to honor it. If they take your idea and put it on the market, you have full capability of suing them. However, similar to what Viraj said, if a second company puts your idea on the market you can not sue anyone unless you have concrete evidence that the first company leaked the idea to them. However, if the same scenario happened with a patent instead of a NDA all of the rights to the idea belong to the original person. NDA's are still important for several reasons. They help remind people that they signed a document to not reveal or accidentally spread another person's idea. NDAs are often used before or a patent is filed or completed, and can provide further back up in a case where someone infringed a patent.
As stated here, there is a pretty big difference between an NDA/ CDA and a patent. There are also a few versions of NDA/CDAs, a one way to the company or from the company and a two way. Comapnies can provide information to and from each other in a two way NDA without much worry that their information will be shared to other people outside the agreement. In a one way, one company is providing information to the other in order to do something, like create a quote for a design job. Essentially they NDA will allow companies to communicate freely with each other with proprietary/ company secrets in order to conduct business.
It's also important to note that a NDA is a contract. And contract law is an entirely separate field from patent law. How contracts are interpreted is a matter of state law, and interpretations vary from state to state.
NDA (nondisclosure agreement) is a legal contract that protests sensitive information. NDA can be used when new product or design is in developing stage to help the inventor keep patent rights. Properly written NDA can help the inventor hold the rights to the specific product. In case when the product would be presented to the public, the inventor can lose his patent rights. Nondisclosure document specify which information are private and which are not. Many times the new hired employee must sign NDA to protect the sensitive information in the company. The patent gives the rights of the product to the inventor. Generally patent is given for 20 years in USA and can be issued by the United States Patent and Trademark Office.
There is a huge difference between an NDA and a patent. The patent is a federal document utilized to protect and enforce the exclusivity of an idea. An NDA is a contract between two people or a person and an organization. The intent of the NDA, depending on the state, is to limit competition or the dissemination of trade strategies/secrets. The intent of the patent is to enforce the protection of a unique idea. One focuses on contract law and the other focuses on patent law.
To give yourself the 'ultimate protection' from having your idea stolen, it is a good idea to have a three step process.
Step 1. Apply for patent protection
If your invention can be protected by a patent, applying for this protection should be your first step before discussing it with anyone except a patent attorney.
Step 2. Prepare a non-disclosure agreement (and get it signed)
This is also referred to as an NDA or confidential disclosure agreement, a non-disclosure agreement is a standard business practice when one person or entity must disclose confidential information to another.
Step 3) Disclose only as much as necessary
Even with a patent application on file and a signed NDA, you should still take one extra precaution. Do not say more than you need to, even if the details are exciting and you want to share them.
There is a clear difference between a patent and a NDA. First of all a patent is a legal document that gives you or a company a legal binding of ownership that is reinforced by penalties. The NDA is a contract that is limited. If we are comparing the two by law, a patent is far more power than NDA. NDA seems like a good security blanket but not a good idea for a new product or idea. NDA is only strong as the contract. It is possible to find loopholes in the contract. For example, two people sign a contract for a new device. One person tells his friend about this idea and they start to develop this device. There is nothing you can do because the contract is between you two not the friend. You can sue the partner but not the friend. So patent is the better route.
I feel our class mates described the difference very well. I would just like to add that at times the idea may not be developed enough to allow for a patent application. In these cases it is advised to have an NDA and apply for a provisional patent, which is a legal document filed before the developed patent to ensure an early filing date as to protect the idea, but must have the patent filed within a year.
One of the main advantages that I have seen with patents over NDAs is that a patent can offer a competitive
advantage over other companies. For instance when talking about drugs and drug delivery systems, if you have found that your product has worked best with certain processes or certain reagents patents can offer more protection. If other companies try to market a similar drug patents might help ensure that the competitors product does not get on the market or at least it may cause their product to be inferior due to the restrictions. NDAs may prevent the spread of information but does not mean other people and businesses can not figure it out for themselves.
NDAs offer a standout amongst the most surefire approaches to protect trade secrets and other private data intended to be kept under wraps. Data normally protected by NDAs may incorporate schematics for another item, customer data, deals and promoting plans, or a novel assembling process. Utilizing a nondisclosure assention implies your secrets will remain underground, and if not, you'll have lawful plan of action and may even have the capacity to sue for harms. NDAs are a nearly surefire approach to affirm that private data remains protected in an assortment of circumstances
Non-disclosure agreements can be defined as an agreement by which companies or various individuals agree to keep information confidential. NDA is a contract and not a law. Contracts are interpreted in different manners depending on the state law and interpretations vary from state to state. Patent law, which is federal, is interpreted uniformly throughout the United States.
An NDA may come in handy if the same person or the company that signed the NDA goes behind your back and develops your idea. A patent, however, covers you from having your product replicated by someone else even if they innocently or coincidentally develop the same product. The individual could be held liable for a patent infringement. Filing a patent prior to disclosing any ideas to a company or individuals you do no trust will put an individual in a better position. NDA’s are only useful if the individuals are honest. This keeps honest people quiet.
From my understanding, you would need to first have a patent to protect your ideas. An NDA protects you from other people that get involved in the project. You may need to have both to fully protect your ideas, especially when involving a third party. A patent, as described above, will ensure that no one can replicate your ideas. An NDA ensures that no one that knows of it in more detail will go and sell your idea or even share the information in a casual setting. However, an NDA requires that the person signing it is fully trusted.