Q: I have been asked to sign a confidentiality agreement supplied by a company to whom I propose to disclose my invention for evaluation purposes. I understand that these contracts are fairly standard so presumably I should just go ahead and sign.
A: No. Many suppliers' contracts are very one sided. Last week I looked at one for a client which limited confidentiality to one year. I would go for at least 20 years and preferably an obligation to keep the information secret forever, unless it falls into the public domain. In addition you must make sure the agreement provides that the user will keep the information secret. It is not enough that they will try to keep it secret or apply the same standards they apply to their own information (they may not keep their information properly secure - you do not know).
Secondly the information should be used only for the purposes of the evaluation or other stated purpose and must be returned to you on demand with no copies made. Even better protection is obtained if you require all those individual employees who will see the information to sign a direct confidentiality deed with you so you can sue them as well as their employer if they take your rights.
Inventors Legal Problems
Related further reading by Susan Singleton...
Editors Note: These articles first appeared as Susan Singleton's very popular column in Inventors World magazine.
Due to the changing nature of the law, Susan has fully updated them for 2015.
For more Inventors' Legal Problems go to:
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Q: When do I use a patent attorney and when an intellectual property lawyer?
A: Patent attorneys/agents are the people to use when drawing up a patent and where you have questions about what is patentable. Some solicitors employ patent attorneys who are not solicitors or barristers but tend to have a science degree and have taken examinations relating to IP. Make sure your patent attorney is a member of the Chartered Institute of Patent Attorneys (CIPA). Solicitors who specialise in intellectual property draw up contracts, licensing deals and advise where patents or other rights are infringed; though there is some overlap with patent agents here. Make sure you use a solicitor with experience in this area. Solicitors must have compulsory indemnity insurance cover of a minimum £2m and are regulated by the SRA/Law Society. If you have a major intellectual property dispute you will also need to instruct a barrister to represent you in court though solicitors and patent agents do have wide rights "of audience" (i.e. to speak in court) in the Enterprise and Intellectual Property Court (EPIC - previously Patents County Court).
Q: What is an option agreement? One company I am talking to has said it may offer me one.
A: There is no legal meaning to the term and you should first establish what is on offer before agreeing. Usually it means the company concerned needs time to assess whether it wishes to commercialise your invention and agrees to pay you a fixed sum in return for your agreement not the offer the invention to anyone else in the meantime. Make sure it is a legally enforceable document, that you are paid enough and that the time is not open ended. Occasionally option agreements are used by manufacturers simply to keep others out of the market, so ensure the money offered to you is sufficient to compensate you for the lost time.
Q: I am negotiating with a licensee who say it will be impossible for them to exploit my invention unless I assign them the rights. I just want to grant them a licence but retain ownership of my patent application and knowhow. Are they right?
A: Sometimes licensees speak authoritatively and attempt to browbeat the inventor. They may suggest that, in their experience, inventors always have to assign rights. I had a case earlier this year in which the defendant was in his teens and had no experience. He assigned his rights and later tried to get out of the assignment. It is very hard to extricate yourself after the contract is signed, particularly if you have taken legal advice. So seek advice from friends, contacts and colleagues before accepting as the truth all statements made by potential licensees about the right way to do things.
In practice the licensee does not need to own the rights. A well drafted licence can give him all the rights he needs to commercialise your invention. Also make sure the licence is not too broad. An exclusive licence can be drafted by licensees in such a draconian fashion that it is tantamount to an assignment of the rights. Only give away a limited territory and include close controls over the licensee and rights to terminate.
Q: I will be exploiting my invention throughout the European Union. Is there any way I can register my rights throughout Europe?
A: You can apply for a Community Trade Mark for any name or sign you sell your invention under. This provides EU-wide protection under trade marks law. There is no Community Patent yet but there may well be by 2017, but you can make an application under the European Patents Convention for a European Patent. This however results in your obtaining a series of national patents. You may also now register and EU- Wide Community Design Right.