As an inventor, your greatest fear is that your idea would be copied and stolen. The worst part is that those closest to you such as your manufacturer could do that to you. On top of that, they could use your own molds that you paid for to make and sell your products to others. You need to make sure that this doesn’t happen to you.
You can use the tips below to protect yourself from your manufacturer
How finding a trustworthy manufacturer protects your idea?
The most important factor that you need to look for in a manufacturer is trustworthiness. If they are trustworthy, they will hold to their end of any agreement they have with you. Even those agreements that require them to not copy your idea.
No matter what type of agreement, no matter the strength of your agreement, and no matter the price, you cannot do business with a manufacturer that is not trustworthy.
To find a trustworthy manufacturer, you need to do your due diligence which includes:
- Asking for referrals;
- Asking the manufacturer pointed questions;
- Engaging the manufacturer in simple projects to see how the manufacturer performs; and
- Visiting their plant.
Don’t just believe them. Trust but verify.
How does using an NDA with U.S. manufacturers protect your idea?
The NDA or no disclosure agreement is a promise to keep your idea secret. They can’t file a patent application because it would publish as a patent or pre-grant publication. They can’t market your invention. These would all be considered a breach of the NDA.
But, how do you get manufacturers to sign the NDA?
Early on during the conversation, don’t ask the manufacturer to sign a nondisclosure agreement. That will put them on the defensive. They’ll just reject you. Most companies won’t want to sign a non-disclosure agreement immediately. NDAs are viewed as an invitation to a lawsuit since they require them to keep your information confidential. If there is even an appearance of a breach, they are afraid that you will sue them.
Rather, a better approach is to see if, in general, they can make your product. Talk about generic matters first. You and the manufacturer can get a feel for each other first to see if you’re a good fit.
After a while, you’ll come to a point where you need to share your idea with them. You’ve done your due diligence and you believe that this manufacturer might be a good fit for you. They’ll also want to hear your idea so that they can gain your business. It’s at this point that you should ask them to sign a non-disclosure agreement.
How does using an NNN agreement with Chinese manufacturers protect your idea?
The NNN agreement works in the same way as the NDA to protect your idea. The Chinese manufacturer is agreeing to protect your idea.
But, how do you get a Chinese manufacturer to sign an NDA?
First, don’t call it an NDA. Just ask them to sign an NNN agreement which stands for non-disclosure, non-compete, and non-use. It’s their version of the NDA. Because of that, you’ll get less pushback from manufacturers in China since they’re used to signing these agreements.
Click here to download a sample NNN Agreement.
How does using multiple manufacturers prevent your manufacturers from stealing your idea?
You could split up the production of your product amongst 2 or more manufacturers. This only works if your product has multiple components. In this way, no one manufacturer would know what the product is and don’t have all of the information to steal the idea from you.
How does documenting your idea prevents a manufacturer from stealing your idea?
You should document your idea to protect yourself against the manufacturer. The document we are referring to is an inventor’s notebook. It’s typically a dated running log of your ideas in a bound book.
By documenting your ideas in an inventor’s notebook, you can establish which ideas are yours. If the manufacturer claims an idea is theirs, you can prove that you already had that idea by showing them your inventor’s notebook.
Let’s see how this plays out in a typical scenario.
You’ve done your due diligence and selected a manufacturer. You’ve entered into a nondisclosure agreement then you tell the manufacturer about your idea.
As you and the manufacturer brainstorm how to make the product, the manufacturer suggests a feature for the product. They claim that feature as their own.
Does that feature belong to the manufacturer? Or do you own the intellectual property?
That’s the dispute between the manufacturer and you. By showing them your inventor’s notebook, you can show the manufacturer that you already thought of that feature. You can establish that the feature already belongs to you.
The manufacturer might argue that you fabricated the document after the fact. However, it’s harder to do with a running logbook that’s dated.
How a patent application prevents your manufacturer from stealing your idea?
The patent application provides further proof that you invented a particular idea. In the event the manufacturer suggests a feature for your product, the patent application establishes that feature as your own if it’s already in there. They can’t argue that you fabricated the document after the fact because the USPTO establishes the filing date of that document.
How a patent prevents your manufacturer from stealing your idea?
A design patent can prevent your manufacturer from using the molds that you paid for to make and sell products to others. If they use your molds, those products would be infringing on your design patent. You can sue them for patent infringement.
Moreover, if you get a utility patent, the manufacturer can’t infringe on your utility patent. Otherwise, you would sue them for patent infringement.
In order to more effectively protect yourself against manufacturers, the final agreement between you and the manufacturer should include an assignment of all inventions — including any features or modifications your manufacturer’s engineers conceive during the engagement. For example, if they came up with a feature that you like, you should be able to get a patent for that. After all, you paid them money to make products for you. This is especially critical when working with Chinese manufacturers, who routinely push back on invention assignments with talk of “long-term relationships” and “trust” — language that means nothing if they can’t later be found. See why the Fortress Iron ruling makes this a non-negotiable requirement, and how to demand it without blowing up the relationship. You can also read more about disclosure agreements in: Nondisclosure Agreements and other basic agreements.