Beware of the Pitfalls of Discussing Inventions with Third Parties

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Marshall, Gerstein & Borun Partner Richard B. Hoffman warns against divulging information about inventions to third parties and compromising intellectual property. His patent expertise and cautionary advice for inventors appeared in the April 2010 issue of "Biomass Magazine."

Often in working with people outside of one's company when dealing with research and development problems, innovators need to share information to work towards a solution

Marshall, Gerstein & Borun LLP partner and chair of the firm's Cleantech and Renewables group Richard B. Hoffman provides a detailed and cautionary tale for innovators in the renewable energy and clean technology fields who regularly share information on their inventions with the external sources and vendors they work with. Hoffman summarized these issues in an article which appeared in the April 2010 issue of Biomass Magazine (http://www.biomassmagazine.com/article.jsp?article_id=3622).

"Often in working with people outside of one's company when dealing with research and development problems, innovators need to share information to work towards a solution," said Hoffman. "But if not navigated cautiously, these third-party inquiries can have serious consequences for innovators and the intellectual property rights of their inventions."

Interactions with third-parties frequently arise when an innovator's organization simply is unable to supply all the technical requirements for an invention internally. Innovators reach out to academics, outside experts and consultants, equipment builders and subcontractors, prospective business partners, testing companies, repair technicians, software developers, and sales representatives throughout various stages of developing and testing the invention. Problems can arise when information is exchanged and there is no clear indication of who retains control of it.

Hoffman recommends crafting and implementing written agreements early in the process with external third-party sources. For example, innovators should develop a consulting agreement with an academic scholar or private consulting company that specifically addresses confidentiality and ownership of the IP rights. This is critical in defining both party's expectations and responsibilities. Confidential disclosure agreements, otherwise known as nondisclosure agreements, are vital when dealing with technical consultants and engineering experts, as they ensure that any inventions created with the help of the third party are transferred and owned by the innovator's company.

Additionally, Hoffman recommends considering each third-party's contribution specifically in order to craft an agreement that will best protect an innovator's IP rights. For example, mutual confidential disclosure agreements are ideal when in sales negotiations with a prospective business partner who has his own confidential information invested in the project. In other cases, such as when dealing with service technicians who may come in as visitors to help the main third-party contact, it is best to use an entrance form including confidentiality and IP obligations upon entering the premises.

"Innovators often need the help of outside experts throughout the research and development of their invention, but taking precautions early on and being more aware of what you say and who you say it to can help avoid many intellectual property issues," said Hoffman.

Richard B. Hoffman has more than 35 years of experience practicing law in intellectual property, especially in patent prosecution, which includes patent application preparation and counseling on design patents and trade secrets. He regularly counsels executives and entrepreneurs in emerging cleantech fields on the options available to protect their intellectual property by utilizing cost-effective solutions suitable to facilitate, protect and defend commercial success.

For more than 50 years, Marshall, Gerstein & Borun LLP has maintained an exclusive focus on the practice of intellectual property law. The firm's strengths include patent and trademark prosecution, copyrights, trade secrets, IP transactions, litigation and technology transfer. Clients include Fortune 250 corporations, multinational businesses, start-up organizations, non-profits and companies in industries from material science to biotechnology. Marshall, Gerstein & Borun has been recognized as a top IP law firm by Fortune, Intellectual Property Today and Managing IP magazines. For more information about the firm, visit http://www.marshallip.com.

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THOMAS CIESIELKA
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