It is a tough balancing act. On the one hand, you want to grow your business and wow potential investors with your great ideas and concepts. On the other, you need to keep your trade secrets to yourself to avoid anyone else stealing them and using them for their own benefit. Here are some precautions you can take.
The first thing to do is research who you are dealing with and discuss your concerns with your potential investors. Intellectual property is precious, and they should understand that you need to protect yourself. In fact, they should welcome the initiative of a prudent potential partner. If they do not, take it as a red flag and disclose your information cautiously.
As discussions move along and you need to reveal more and more information, consider signing a formal nondisclosure agreement. While model agreements are available online, consider hiring a professional to draft one customized for your specific type of business. A nondisclosure agreement will not necessarily stop someone who is acting in bad faith from stealing your ideas, but it will make proving your ownership of the intellectual property, and the damages associated with the idea theft, much easier.
In the same way, make sure to document the elements that you own and take notes as to what was revealed to whom and when. Following any meeting, you should write down, at the very least, who was present and what was discussed. If ever litigation ensues, you will need to prove all of these elements for your case.
Official Intellectual Property Protection
In Canada, the protection of intellectual property is centered around the Canadian Intellectual Property Office, or CIPO. You can register your intellectual property, thereby proving your ownership and gaining legal protection. The CIPO distinguishes between four essential types of intellectual property:
- Trademarks – the brand, name, or logo that distinguishes your business from others
- Patents – protected inventions or innovations on machines or processes
- Copyrights – protection for literary, artistic, dramatic, and musical creations
- Industrial Designs – protection for the original visual features of a product
Depending on which type of intellectual property applies to you, you should consider the possibility of registering your intellectual property prior to meeting with potential investors. This act has a twofold benefit. First, you have the additional protection against idea theft, and second, the property will become more valuable for the potential investors.
Registration of intellectual property is not a complicated process, but it does take a long time, often more than a year. The good news is that you do not have to wait for it to be complete before you seek investors since it will be retroactive to the date of your filing. Meanwhile, you can use terms such as “trademark pending” or “patent pending” to describe your intellectual property.