Jul 5, 2023 | IPR & Business
In the contemporary business landscape, Intellectual Property (IP) is emerging as one of the most important assets that a company owns. Intellectual Property is increasingly occupying a central role in any overall business and growth strategy of an organization. By effectively managing and optimizing IP, the organizations stand to derive maximum benefits and gain a competitive edge. However, IP Due diligence is extremely critical to identify the ways IP shall be identified, safeguarded, monetised & enforced.
IP due diligence & its objective
Every business possesses one or the other form of Intellectual Property and most of the times, such IP is either under-utilised or un-identified. Though it may not be required to register all IP assets, it is pertinent or rather crucial to identify it to take decision on whether it is worth registration or not.
Any investigation or exercise that aims to determine the health, validity and value of intangible assets like IP, forms part of IP due diligence. IP due diligence is a set of parameters required to have in a company to ensure that IP:
- is not misappropriated or leaked from the company,
- is protected in right legal framework,
- is brought to the market at right time, either by itself or by licensing it out, and
- infringement analysis is done at right time to prevent infringement of third party’s IP rights,
- systems & processes are created to monitor unauthorized use of own IP by the third party (ies).
The primary objective if IP due diligence is to realize full value of IP assets by identifying them, take strategic decision about safeguarding them and further formulate a clear roadmap detailing the steps for the effective management.
Steps involved in IP due diligence
The main purpose of IP due diligence is to assess & optimise value of IP and mitigate the risk associated with its loss or infringement. The IP due diligence steps and strategies may be different for each company depending upon area of business, skill set of employees, kind of core IP and jurisdiction, however, this article focusses on the general steps. It is recommended to take expert legal advice to formulate customised steps for effective IP due diligence for your company’s specified needs.
Step 1: “As-is” IP assessment
Before we dig further into IP due diligence, it is crucial to understand and determine the IP that a company owns. Spotting IP and identification of right legal framework in which IP shall be registered is found to be challenging by majority of the organizations. Most of the IP can be registered in the form of patent, copyright, design or trademark. In addition to this, there may be a possibility to protect some form of IPs as trade secret as well. Certain steps like patent/trademark search right in the beginning may be extremely useful to create a stronger IP and give right direction to the R&D efforts. Investigations like patent landscape are helpful to understand global trends related to evolution of the technology.
Step 2: Leakage of IP from the company
Like any tangible form of property, IP also needs protection. However, owing to its intangible nature, sometimes it becomes challenging to take right steps to safeguard such crucial IPs. First of all, one must identify the channels through which IP leakage happens. Most of the times, IP leakage happens through ex-employees, consultants, customers etc, knowingly or unknowingly. Some of the ways to seal these leakage points are as below:
- Have stringent agreements with employees, vendors, customers, consultants
- Periodic IP sensitization programs in the company
- IP Policy detailing security and confidentiality & security clause
- Label confidential files as ‘Confidential’
- Restrict access to confidential information of the company
Step 3: Strengthening existing IP
Review of literature is an important step in the new product development process because without knowing what is already been done, strong IP cannot be created. The wealth of knowledge available in the form of patents or paper publication can be immensely helpful to create more innovative products and reduce R&D cycle. At the time of new product development, if a thorough patent search is done and expert advice is sought, there may be a possibility for the companies to leverage some of the good patents which are either abandoned or expired or not filed in the desired jurisdictions. However, this shall always be done with expert advice and jurisdiction-based opinion on patent infringement risk.
Step 4: IP protection in right legal framework
Broadly speaking, a company may have IP which may or may not be registered. Invention, design, brand name can be registered as patent, design and trademark respectively whereas confidential information or trade secret can be protected by maintaining secrecy of it. In order to protect confidential information or a trade secrets, clear and stringent processes, policies and practices shall be devised. Some of the examples of trade secret are recipe of Coca-Cola, chicken recipe of KFC etc. For any information to be qualified as a trade-secret, following conditions shall be fulfilled:
- Information shall not be known to the public,
- It shall be valuable for business,
- Owner should have taken sufficient measures to protect it.
Spotting IPs in a product, identifying the right legal framework to protect it at a right time shall be done by the experts sothat the product is protected in the best possible manner.
Step 5: Infringement risk assessment
IP infringement refers to unauthorized use or encroachment upon the IP rights of a third party (ies), and its consequences can be fatal. IP infringement risk analysis shall be done before the product launch to understand if there is any infringement risk. Jurisdiction specific opinion by the legal expert on IP infringement may be helpful to mitigate the infringement risk. Further, periodic IP audits shall be performed to identify external software downloads.
Step 6: IP commercialization
Creation of IP requires significant investment in terms of time, money, and resources. Every good investment should yield returns and therefore, it is reasonable to say that when companies spend money to create IP, they must explore the ways to recover that investment by commercialization of IP, either on their own by integrating such IP onto their products or licensing it out to other potential partners who may bring such IP in the market.
Step 7: Enforcement of rights
One of the reasons for the companies to spend money in R&D and IP registration is to attain competitive edge in the market and create a boundary for the competition. Therefore it becomes important for the companies to be vigilant about unauthorised use of IP by the third party (ies) and they should enforce their rights in case IP infringement happens.
Conclusion
IP due diligence is indispensable for any business aiming to create, exploit, enforce their IP in most effective manner, especially when competition is ever increasing, and business sustainability depends on being “ahead of the curve”. Establishing a strong and robust IP regime that incorporates proper processes, practices, policies and agreements with an aim to optimise benefits of IP created and owned by any company, is of paramount importance.
Authors: Bhavya Sharma, Bhuvnesh Sharma
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Jun 16, 2023 | General, IPR & Business
In 2019, two senior executives of a Bangalore-based IT company were arrested for allegedly stealing data from their employer’s company and using it for their own company. They accessed the company’s client list and used it for their own benefit. Upon further investigation by the company’s operations team, it was found that it was Intellectual Property (IP) that was stolen and the money diverted. In Navigators Logistics Ltd v. Kashif Qureshi & Ors., the court held in favour of the employees saying that the former employers cannot restrain them from using their customer list.
Today, most businesses are facing the threat of IP theft or leakage by the their members such as employees and even consultants. Intellectual Property (IP) is a valuable asset for any organization not just due to its market value, but also the amount of money and effort which goes in to create it. Due to its intangible nature, IP is easy to misappropriate & leakage of IP may happen due to inappropriate disclosure by employees, lack of safety measures or weak policies and agreements.
In this article, the term “IP leakage” refers to a situation where the IP of an organization is made available or accessible to third parties in a wrongful manner, causing a monetary or reputational harm to the organization. The term IP here includes registered and non-registered IP, technical and business information which is sensitive and confidential in nature.
For the organizations, identification and sealing of IP leakage points is necessary to realise the long term value of IP. Top 10 strategies to prevent IP leakage are listed below:
- Figure out what is the IP in your organization
The first step to avoid IP leakage is to identify what is the IP in your organization and what its potential value for the business is. Without taking stock of existing IP and knowing the nature of IP, one will not be able to devise appropriate strategies to safeguard it. Typically in an organization, the IP is in the form of software codes, proprietary products, designs, new inventions, new products, business plans, know-how, confidential information etc. Once the IP is catagorised, one may figure out the ways to safeguard it.
- Stringent Agreements with confidentiality clause
While transacting with external consultants, vendors, customers, employees where there is going to be an exchange of IP, one must execute an NDA (Non-Disclosure Agreement) to ensure the IP is safeguarded. Important documents such as NDAs, Service Agreements, MOUs, etc. must be reviewed by a legal expert to ensure that the clauses of such agreements sufficiently and appropriately cover the range of IP the organization possesses along with the knowledge of relevant governing laws, arbitration, return of confidential clause, indemnity and liability.
- IP Policy
IP Policy along with an active IP committee may be extremely helpful in implementing right processes in an organization to handle IP. The IP Policy shall have clauses related to confidentiality and security of the information.
- IP Sensitization programs
Periodic IP sensitization programs by internal or external speakers may play a vital role for the employees, firstly, to understand their roles and responsibilities with respect the safeguarding the IP of the company and secondly, to understand the risk they can impose on the current employer if they bring and use IP of their previous employer.
- Physical security of the documents and files
Important documents and files should be segregated as highly confidential or moderately confidential based on their nature. All documents of confidential nature shall be labelled as “Confidential” and soft files shall have the word “Confidential” as header or footer.
- Restricting access
Some areas in the organization where secret trials, experiments or research are being conducted, should be restricted and only limited number of people should be permitted to enter such areas. Having CCTV camera or restriction to use smart phones may further be helpful.
- Registering IP
Wherever possible, IP should be registered in the form of copyright, patent, design because registration is a very effective way of safeguarding IP. The certificate of registration obtained from the Government can serve as evidence of ownership of IP. Once IP is registered, one can disclose it to others without a fear of losing it.
- Exit interviews and induction for new joiners
When employees leave the organization, they take a lot of IP of the company with them in the form of experience and know-how. An exit interview to remind them of their responsibilities, liabilities and the agreements undertaken by them is a very effective step to safeguard IP of the company. Similarly, an induction program for the newcomers focussed on dangers of misappropriating previous employer’s IP plays an important role in sensitising newcomers about the guidelines and processes of handling IP.
- IP audit
An annual IP audit is immensely useful in identifying any gaps in the IP processes adopted by the company. Audit also helps to take stock of existing IP, check their status to docket upcoming official timelines.
- Using software to track transfer of data or information
Nowadays, there are many software technologies available in the market which may be used to track the transfer of data from electronic devices thereby helping in protecting the company’s IP.
Leakage of IP in an organisation may be detrimental to the business and hence special care has to be taken by the organisation to deal with such situations. Strategies that need to be adopted to safeguard IP may vary depending on the kind of business jurisdiction, but a few basic principles as stated above are simple steps that an organisation must adopt to safeguard their IP and prevent leakage to avoid any damages or losses.
Authors: Bindu Sharma (Origiin IP Solutions LLP), Bhavya Sharma (Jindal Global Law School)
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Jun 14, 2023 | General
In today’s rapidly evolving technological landscape, the transfer of intellectual property rights, know-how, and technology plays a crucial role in driving innovation and economic growth. Technology transfer agreements serve as legally binding contracts that govern the transfer of these valuable assets from one party to another. Such agreements provide a framework for the licensor (the party transferring the technology) and the licensee (the party receiving the technology) to establish their rights and obligations, ensuring a smooth and mutually beneficial transfer process.
A technology transfer agreement is a legal contract that governs the transfer of intellectual property rights, know-how, or technology from one party to another party. This agreement ensures that both parties understand their rights and obligations regarding the use, ownership, and protection of the transferred technology.
Advantages of Technology Transfer Agreements:
- 1. Facilitates Knowledge Exchange and Collaboration
Technology transfer agreements enable the exchange of specialized knowledge, expertise, and technical information between the licensor and the licensee. This collaboration allows the licensee to gain insights into new technologies, methodologies, or processes, which can enhance their own research and development efforts. It promotes innovation by leveraging the strengths and capabilities of both parties.
- Accelerates Commercialization of Technology
By entering into a technology transfer agreement, the licensor can commercialize their technology more effectively. The licensee gains the rights to use, manufacture, or sell the technology, leveraging their existing infrastructure, market access, and distribution channels. This accelerates the process of bringing innovative products or services to the market, benefiting both the licensor and the licensee.
- Expands Market Reach
Technology transfer agreements often involve the transfer of technology across geographical boundaries. For the licensor, this opens up new markets and opportunities that they may not have been able to access independently. The licensee, on the other hand, gains access to cutting-edge technologies or intellectual property rights that can enhance their competitiveness in existing or new markets. It facilitates market expansion and growth for both parties involved.
- Risk Mitigation and Shared Expertise
Technology transfer agreements allow for the sharing of risks and responsibilities between the licensor and the licensee. The licensor can mitigate their risks by transferring technology to a party that has the necessary resources, capabilities, and market presence. At the same time, the licensee benefits from the licensor’s expertise, research, and development efforts, reducing their own risks associated with developing new technologies from scratch.
- Access to Intellectual Property and Exclusive Rights
For the licensee, a technology transfer agreement provides access to valuable intellectual property rights, patents, trademarks, or copyrights associated with the technology being transferred. This grants them exclusive rights within a specified territory or market, ensuring a competitive advantage over rivals. The licensee can leverage these intellectual property rights to protect their investments and prevent unauthorized use by others.
- Cost Savings and Efficiency
Technology transfer agreements can lead to cost savings for both parties. The licensee avoids the expenses associated with extensive research and development, as they can leverage the existing technology or know-how. The licensor benefits from the monetization of their technology, generating revenue streams through licensing fees, royalties, or other financial arrangements outlined in the agreement. This efficient utilization of resources benefits both parties.
- Legal Protection and Clarity
By entering into a technology transfer agreement, both the licensor and the licensee obtain legal protection and clarity regarding their rights and obligations. The agreement clearly outlines the scope of the license, the permitted uses of the technology, and any restrictions or limitations. It also includes provisions for confidentiality, intellectual property rights, representations and warranties, and dispute resolution mechanisms. This clarity minimizes the potential for misunderstandings, disputes, or infringement issues.
While the specific clauses included in a technology transfer agreement can vary depending on the nature of the technology and the parties involved, here are some important clauses commonly found in such agreements.
- Introduction and Background
The agreement typically begins with an introduction section that identifies the parties involved and provides a brief background on the purpose and context of the technology transfer. It may include a description of the technology being transferred and the objectives of the agreement.
- Definitions
This clause is included to ensure clarity and common understanding of key terms used throughout the agreement. It provides precise definitions of important terms, such as the technology being transferred, intellectual property rights, know-how, confidential information, and any other specific technical or legal terms unique to the technology or the agreement.
- Grant of License
This clause outlines the scope and terms of the license being granted by the licensor to the licensee. It specifies whether the license is exclusive or non-exclusive, meaning whether the licensor grants the licensee the sole rights to use the technology or if other licensees may also be allowed. The clause may also define the geographical territory or market in which the license applies.
- Payment Terms:
This clause details the financial aspects of the agreement, including any upfront fees, royalties, or milestone payments that the licensee is required to pay to the licensor. It may specify the payment schedule, currency, and any additional financial considerations. This clause also commonly addresses audit rights to ensure accurate reporting and verification of sales or usage data.
- Confidentiality and Non-Disclosure
Given the sensitive nature of technology transfer, this clause establishes the obligations of both parties to maintain the confidentiality of the transferred technology and related information. It includes provisions for marking information as confidential, restrictions on disclosure to third parties, and the duration of the confidentiality obligations. This clause ensures that proprietary information remains protected.
- Intellectual Property Rights
This clause addresses the ownership and protection of intellectual property rights associated with the technology being transferred. It clarifies whether the licensor retains ownership or if it is transferred to the licensee. It may also include provisions for the registration, maintenance, and enforcement of these rights, as well as any limitations or restrictions on their use.
- Representations and Warranties
In this clause, the licensor makes certain statements and assurances regarding the technology being transferred. These representations and warranties may include affirmations about the licensor’s ownership of the technology, its validity, or its non-infringement of third-party rights. This clause provides a level of assurance to the licensee regarding the quality and legality of the technology.
- Indemnification
This clause outlines the parties’ obligations to indemnify and hold each other harmless from any claims, damages, or liabilities arising from the transfer or use of the technology. It provides protection in case of intellectual property infringement or other legal disputes. The clause may specify the indemnification process, including notice requirements and the extent of the indemnifying party’s liability.
- Term and Termination
This clause defines the duration of the agreement and the conditions under which either party can terminate it. It may include provisions for termination due to breach of contract, insolvency, or mutual agreement, as well as any post-termination obligations, such as returning or destroying confidential information or discontinuing the use of the technology.
- Governing Law and Jurisdiction
This clause determines the jurisdiction and laws that will govern the interpretation and enforcement of the agreement. It helps resolve any potential disputes by specifying the courts or arbitration procedures that will have jurisdiction over the agreement. This clause ensures that the agreement complies with the legal requirements of a specific jurisdiction or that it aligns with the parties’ preferences for resolving disputes.
In conclusion, technology transfer agreements play a vital role in facilitating the transfer of intellectual property rights and technology between parties. They promote collaboration, accelerate commercialization, expand market reach, mitigate risks, provide legal protection, and offer various other advantages to both licensors and licensees. These agreements are essential tools for fostering innovation, driving economic growth, and maximizing the value of technology.
Reference
Akhzami, & Al, S. (2018). Technology Transfer and Commercialisation. Daya Publishing House. Retrieved from https://www.perlego.com/book/3067576/technology-transfer-and-commercialisation-pdf (Original work published 2018)
Author: Anas, Christ Academy Institute of Law, Bengaluru
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Jun 7, 2023 | General, Patent
This article has been authored by Bhavya Sharma, a student BBA, LLB from Jindal Global Law School during her internship at Origiin IP Solutions LLP. In this article, she analyses and lists out advantages of Unitary Patent System in EU
After decades of legislations attempting to introduce a unitary patent system amongst the European countries, this feat was finally achieved on June 1st, 2023, when the European Commission welcomed the launch of European Unitary Patent System across 17 nations of the European Union, representing about 80% of the Union’s GDP[1]. This is a landmark achievement as this System will significantly simplify the patent processes across the EU borders. The Agreement of Unified Patent Court (UPCA) was signed on 19th February 2013 by 24 EU member states. The legislation did not come into effect until June 1st, 2023, due to many political factors influencing the landscape of the EU such as Brexit (2020) and the issues posed by the German constitutional court with respect to this agreement. Finally, 17 EU countries have ratified this agreement and a detailed legal framework has been laid down to be followed to efficiently execute this system.
The System comprises of the Unitary Patent Protection (UPP) and the Unified Patent Court (UPC) together[2]. The Unitary Patent System (UPS) will strengthen the EU’s innovation and competitiveness in the patent market by introducing a unified registration and enforcement of patents across the 17 countries that have ratified this agreement. It will provide a “one-stop-shop” for patents in Europe. This brings immense benefits to the companies and innovators. This will allow them to receive a ‘unitary’ patent for their innovations and inventions, valid across all participating member states[3]. This will reduce the costs of filing separate patents in different countries. The earlier level of costs for renewing patents every 10 years separately in member states amounted to approximately €29,000. With the introduction of UPS, the costs would come down to €5,000[4], which is a significant reduction which will incentivize companies to file their patents in the member EU nations. Another benefit of this cost reduction is that it will overcome the cost gap for filing patents between European countries and other major players such as USA or Japan.
The most obvious benefit of this agreement is the time-reduction as it has become a “one-stop-shop” for registration of patents[5]. The System also introduces uniformity amongst the Member states making the entire legal process streamlined and more effective. For this very purpose, the Agreement also established the Unified Patent Court (UPC). It is an international Court that has exclusive jurisdiction in “classic” European patents and European Patents with unitary effect[6]. Its jurisdiction in “classic” European patents is not guaranteed and can be excluded entirely and brought to national courts or any competent national authorities instead normally, as well as during the transitional period of seven years. The Court comprises of a Court of First Instance, a Court of Appeal and a Registry. Additionally, a Patent Mediation and Arbitration Centre is established to resolve matters amicably[7]. This entire legal framework will ensure smooth functioning of the System and increase the efficiency of the patent registration, filing, enforcement and renewal of patents in Europe and make the patent landscape more fertile for new innovators and businesses. It will enhance the competitiveness and quality of patents emerging from the EU, while also attracting foreign investments into the EU.
Procedure for filing a ‘unitary’ patent
As is the regular procedure, the applicant must first file a European Patent Application at the European Patent Office (EPO). The EPO then follows standard procedure which remains unchanged, it checks all the necessary details and conducts an examination, if it yields positive results then it will lead to the grant of a European Patent. Then within one month, the applicant has the option of requesting the EPO to grant unitary effect for the participating nations.
In the moment the Unitary Patent System enters into force, two transitional periods are predicted when the patent reaches its final phase of grant procedure. The first transitional measure will allow applicants to file requests for the Unitary Patent even before the start of the Unitary Patent System. Once the System starts, provided that all other prerequisites for the patent registration are met, EPO will register the patent with unitary effect. If there are any deficiencies, the EPO can ask for corrections or reject the request.
The second transitional phase will provide the possibility of the applicant requesting a delay in the issuing of a grant of a European patent until the Unitary Patent System comes into effect. This will postpone the date of issuing of grant until it can get unitary effect, thereby including previous patent requests in the purview of the Unitary Patent System as well[8].
The Unitary Patent System also overcomes the linguistic barriers faced by applicants while filing patent registrations in other countries as they have to translate the text every time. A lot of money, time and additional resources are lost in the process of translation and may lead to ambiguity after translation. With the introduction of the Unitary Patent System, the UPC will conduct all the hearings with regards to unitary patents and the proceedings will take place in English, German or French[9]. While this brings uniformity to the whole process and overcomes the translation issues, the use of a few standardized languages may lead to issues amongst locals who do not conduct business in these languages.
Under this System, since a unified patent is granted in 17 nations, if any violation is to be found, the applicant may lose the protection of the patent in all these states if it is successfully challenged. This is a risk that must be taken up by the applicants which may lead to huge losses to companies and businesses.
The Unitary Patent System is a great stride to achieving maximum efficiency and uniformity in the field of patents in Europe. Many governments in the past and legislations have attempted to bring in this change from 2000, but it is only 23 years later that it has become possible. As of now there are 17 EU nations participating in this system, however the UPCA has provisions to include up to 25 nations of the EU as well. If the UPS is implemented properly and functions smoothly, one can hope that the entire EU is united in the future making the patent landscape highly welcoming for newcomers as well as existing players in the industry.
Author: Bhavya Sharma, BBA, LLB, Jindal Global Law School
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[1] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3004
[2] https://www.mondaq.com/india/patent/1185830/the-unitary-patent-system
[3] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3004
[4] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3004
[5] https://ec.europa.eu/commission/presscorner/detail/en/ip_23_3004
[6] https://www.unified-patent-court.org/en/court/presentation
[7] https://www.unified-patent-court.org/en/court/presentation
[8] https://inventa.com/en/news/article/728/the-unitary-patent-era-is-about-to-begin-what-to-expect
[9] https://inventa.com/en/news/article/728/the-unitary-patent-era-is-about-to-begin-what-to-expect
Jun 7, 2023 | General, IPR & Business
A Non-Disclosure Agreement (NDA) is a formal commitment to refrain from sharing sensitive information with unauthorized individuals. It is crucial in a wide range of corporate transactions, employment agreements, negotiations, and any situation involving the exchange of confidential information. It is a legally enforceable contract that establishes a framework for safeguarding confidential and proprietary data, trade secrets, and other valuable information that contributes to a competitive advantage. NDAs foster trust and enable secure collaborations, business partnerships, and knowledge sharing without the risk of unauthorized disclosure or misuse. Failure to adhere to an NDA can result in legal repercussions, such as litigation or financial penalties.
There are essentially two main types of NDAs. A one-way NDA is utilized when one party discloses sensitive information without expecting reciprocal disclosure. Conversely, a mutual NDA is implemented when both parties are involved in sharing confidential material and have mutually agreed to safeguard it.
How does NDA protect IP?
Intellectual property (IP), which includes trademarks, patents, copyrights, and other forms of creative assets, plays a crucial role in establishing authority, quality, and distinctiveness in the dynamic and competitive business environment, where companies strive to set themselves apart and achieve uniqueness. Certain types of IP, such as trade secrets, are considered confidential due to the potential harm that their disclosure to competitors can cause. Therefore, companies are highly concerned about protecting their IP and employ various measures, including registration and the use of NDA. NDAs are particularly significant when sharing sensitive information with investors or venture capitalists, as they provide a legal framework to prevent unauthorized use or replication of ideas by individuals who have access to confidential data. By implementing a NDA, companies can effectively safeguard their IP, maintain their competitive advantage, and ensure the preservation of their innovative ideas.
Before engaging in collaborations or recruiting external parties, it is crucial to have a well-drafted non-disclosure agreement (NDA) in place. This ensures that any sensitive information, proprietary knowledge, or trade secrets shared during the course of your business relationship remain confidential.
When is an NDA needed?
Starting from the research and development phase, it is vital to require all individuals involved, including employees, contractors, consultants, or any other party with access to confidential information, to sign the NDA. By doing so, everyone is legally obligated to maintain the confidentiality of the information they have access to. Incorporating NDAs into your business practices establishes a clear framework that outlines the obligations and responsibilities of all parties. This not only safeguards your intellectual property but also fosters a culture of trust and confidentiality within your organization.
Some situations where NDA may be necessary are given below:
- When two companies get into a joint venture to develop a new product and exchange their own trade secrets and technologies.
- When a corporation licenses or transfers its technology, software, or other IP to another entity.
- If you are presenting your work or invention to potential manufacturers or suppliers for manufacturing or distribution.
- When enlisting the help of contractors, development teams, or consultants to assist with the conception, refining, or commercialization of your innovation
- It is generally beneficial to have relevant parties (patent attorneys, patent agents, or patent search firms) sign an NDA prior to filing a patent application.
- Participants in certain innovation challenges, or startup competitions may be asked to reveal details about their innovations or business plans.
It is always recommended to sign an NDA with all involved parties to ensure safety of your IP and confidential information. However, there may be certain situations where requesting an NDA may be deemed unnecessary and could potentially deter potential collaborators. If you will not be sharing any confidential or proprietary information, there may be no need for an NDA. Some other situations are:
- If freelancers are not exposed to sensitive information that could benefit competitors, an NDA may not be required.
- If you are still in the process of deciding whether or not to engage with a particular vendor or agency, they might be hesitant to sign an NDA if they have not yet secured you as a client. In such cases, it may be more appropriate to wait until there is a mutual agreement in place before requesting an NDA.
- If the information or intellectual property is already publicly accessible, such as through publications, websites, or open-source platforms, there may be no need for an NDA.
- In collaborative environments like open innovation projects or forums, where the goal is to foster idea-sharing and creativity, participants often rely on open collaboration principles and freely contribute without the need for NDAs.
Precautions to safe-guard IP
In case of an invention, it is best to at least file a provisional application before disclosing it. Provisional application can be filed even when the invention is not fully completed. After filing the provisional application, you have 12 months to file the Complete Specification.
It is of utmost importance to ensure that the NDA includes provisions that outline the consequences that will be faced if either party breaches the agreement. This step is crucial in making the NDA legally binding and enforceable. In the event that the terms of the NDA are violated, it is preferred to have the ability to pursue legal action to safeguard one’s rights. This may involve taking the matter to court, engaging in mediation, or seeking compensation for any damages incurred. By incorporating a clause that clearly states the repercussions of breaching the NDA, it strengthens the agreement and serves as a deterrent for the other party to comply with its conditions regarding the protection of your intellectual property.
Conclusion
Overall, having a comprehensive NDA in place is a critical measure to protect your intellectual property and preserve your business interests throughout the various stages of research, development, recruitment, and collaborations. It provides reassurance that sensitive information will be treated with the utmost care, minimizing the risk of leaks, misappropriation, or unauthorized use. Ensure that you have a solid NDA that covers all possible outcomes. Do a background check on the entity/person you want to hire or work with before signing the NDA and disclosing any IP.
Submitted by: Indra Priyadarshini, Origiin IP Solutions LLP.
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