Forums: Discussions for entrepreneurs and small business.

Alrighty. It is time to turn to my tried and true helpful friends, the community at startupnation ;). After all, I`m merely one buffoon trying to take on the world, making the help I receive from forums like this is priceless. Anyway, I`m an entrepreneur who`s nearing the stage where I will be presenting my idea to an array of people who will hopefully join me on my mission. Whether they will be in the form of web designers, or angel investors is still up in the air, but in both scenerios I`m facing the same problem. Anyway, this idea I have formed contains a selection of trade secrets, and thanks to this community, I have learned how to go about giving myself a form of protection when it comes to non-disclosure. Cue the NDA, a wonderful document I recently discovered. The problem is, I need to grant myself a little more clout when it comes to my idea. After all, it`s called a Non-disclosure agreement, which basically binds the person not to go babble about your idea. What I`m looking for, is something that says they agree that the idea belongs to you, and they waive all right to ownership of the idea....in other words, an Ownership clause. In my mind, this would solidify my protection, and would be an extremely welcomed addition to an NDA. The thing is, I don`t know if I can even add a clause like this to an NDA, or if I even have to... although I figure it couldn`t hurt. While there is already a sentence in the NDA that states...

Nothing in this Agreement shall be construed as granting any rights to Recipient,by license or otherwise, to any of Disclosing Party`s Confidential Information.

I thought it would be more beneficial to take it a step further, cue my personally drafted "Ownership" clause.

 

7. Ownership. Recipient waives all rights to ownership of material marked as confidential, material which is presented in "Portfolio A-5438." Recipient understands that any profit collected in relation to material presented in "Portfolio A-5438" belongs solely to the Disclosing party, the owner of the copyrighted works. Furthermore, Recipient understands that the Recipient`s waiver of ownership and profit in relation to confidential material as presented in "Portfolio A-5438," will remain in full force and effect whether material is in written form, or has been created in the form of a website as presented in "Portfolio A-5438."

8. Exclusions of Ownership Clause. In the instance that the Recipient and Disclosing party have entered into a binding contract after the marked date of this contract in relation to profit sharing and or ownership of material marked as confidential and presented in "Portfolio A-5438," that contract shall supersede the Ownership clause, but only the extent of which is agreed upon.

As you can see, I reference a particular porfolio, which contains the trade secrets and entire idea, to which they are waiving all rights to. Can I just go ahead an throw a clause like this in an NDA? Am I out of my mind? I just don`t feel as if an basic NDA is good enough, and don`t see any reason why an individual signing the contract shouldn`t agree that the idea is mine, and initially wave all ownership rights until, as stated in the Exception clause, another contract is agreed upon. I`m clearly not a lawyer, so please do start telling me just what is wrong with everything I`ve just said. ;) Thank you all so much.

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I want to know, if I can live with what I know. And only that.

Who is this clause directed too? What I am trying to ask you is that if the clause is directed to vendors, investors, and so on. Plus, it needs to have that the person does not disclose the information to a third party like another retailer.

Because the business proposal is a website, it is directed towards either a web-designer, a business partner, or an angel investor. It will have that they cannot disclose information, that`s what the contract is mostly for. This is just an excerpt of a clause that I added in addition to the standard NDA. Thank you for your reply.

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I want to know, if I can live with what I know. And only that.

If you are seeking to protect  any disclosure, copying, or republication of any of the material contained in your business plan, affixing a copyright notice on such material will place recipients on notice that you are affirming copyright protection in the material.  A copyright automatically, as a matter of law, prevents such actions.

If, on the other hand, you are seeking to protect and maintain ownership of the "ideas" contained in the material, a patent is the method in which to do so.  I would say your proposed clauses are sort of like "chicken soup" - they can`t hurt.  Their enforceability would be suspect, but if you are merely seeking to place recipients on notice of your intentions, I suppose your language works.


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Pepper Law Group, LLC
21 E. High Street, Suite D
Somerville, NJ 08876
informationlaw.com
Now available on DVD!
The Legal Considerations of Starting an Online Business

Thank you for your reply pepperlegal. The advantage I see a patent giving is that it gives you universal protection over the ideas (granted they`re unique enough), whether or not contracts are signed. But I thought a signed contract could grant that same sort of protection, atleast when it comes to the party (and that party alone) that is waiving their rights to certain material by means of their signature. I do want to put them on notice, but I hoping it would be somewhat enforceable and legally binding, albeit not the ironclad protection a patent might provide. Isn`t that the purpose contacts serve, after all?

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I want to know, if I can live with what I know. And only that.

Watson,

This issue goes beyond the scope of these boards - this gets into some heady issues in contract and intellectual property law.  Specifically, there  is a question of whether sufficient consideration is given on the part of the recipient in order to waive any ownership rights of the "ideas" in the material.


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Pepper Law Group, LLC
21 E. High Street, Suite D
Somerville, NJ 08876
informationlaw.com
Now available on DVD!
The Legal Considerations of Starting an Online Business