How and when to disclose your idea

By Seema Mehta

An invention should not be disclosed to third parties until appropriate measures have been taken to legally protect the idea in all jurisdictions of interest.

How and when you disclose your big idea may be as important as having the idea. There are two types of disclosure of an invention that may occur. One is disclosure for purposes of determining ownership, and the other is disclosure of the idea to third-parties. Here are a few tips for each of these types of disclosure to consider along your path.

Disclosure for determining ownership

Once an inventor has an idea for which protection may be procured, the next step is to identify the correct party to inform about the idea. Formally disclosing an inventive concept is not always mandatory, however.

If an inventor is unemployed or self-employed at the time of conception of the idea, the idea can be protected without formal disclosure to the company or any type of review committee. The inventor may then invest in his/her idea by filing for protection under one or more of the available intellectual property (“IP”) statutes (e.g., patents, copyrights, trademarks, etc.).

The issue of disclosure becomes more involved when the inventor is employed with a company at the time of conception of the invention. Typical employment contracts include a clause reciting that any intellectual property discovered during employment is owned by the company, and not the individual.

Some contracts are written broadly to cover almost anything that is brainstormed during employment, and some contracts are written more narrowly, which allow for an inventor to own an idea that is conceived in an area that is unrelated to the inventor’s employment or job description, and without the use of employer equipment. Thus, it is important for an inventor to check his/her employment contract to determine whether the invention is owned by him/her, or the company.

Generally, when the inventor is employed at the time conception of the invention, new ideas attributed to employees are formally disclosed to the company’s intellectual property review committee or a similar group within the company of employment.

The IP review committee is typically tasked with determining whether the company has an interest in pursuing protection for new ideas. Most sophisticated companies have a confidential invention disclosure form that an employee can complete and submit for review for each new idea.

Smaller companies, such as start-ups, may not have such a formal process in place for protection of IP. In this case, the employee-inventor would still have to disclose the idea to peers or in-house legal personnel so that the company can decide whether to invest in the idea.

Although rare, in some cases, when the company decides not to pursue an idea, the employee-inventor can ask the company for permission to own the idea himself/herself. Such an agreement is typically entered into after the passage of some time, so that the company can ensure that the idea is definitely not something they are interested in pursuing. In this case, it is very important to obtain such ownership rights from the company in writing.

Disclosure to third parties

Disclosure to third parties addresses the concept of whether an idea can be shown or described to others, and the repercussions of disclosing an idea prematurely.

Often times, scenarios will occur in which the employee-inventor tells people outside of the company about his/her idea, or shows a prototype of the idea to someone that is not covered a non-disclosure agreement (NDA).

This is what is known as a public disclosure of the invention. Another example of such a public disclosure would be speaking about the idea at a conference or at a trade-show. Once the idea is disclosed publicly, the invention cannot be protected outside of the US.

Within the US, however, the idea may still be protected, but appropriate protection must be sought within one year from the date of the public disclosure, or all rights are lost. Accordingly, to err on the side of caution, an invention should not be disclosed to third parties until appropriate measures have been taken to legally protect the idea in all jurisdictions of interest.

If a public disclosure of a new concept is planned by the company or by the inventor, legal counsel should be informed so that they can ensure that protection of the idea has been filed for at least in foreign jurisdictions.

About the author

Seema Mehta
Seema Mehta is a partner at Osha Liang’s Houston office. Her practice includes foreign and domestic patent prosecution including appeals practice, IP litigation, post-grant proceedings at the USPTO, validity and infringement opinions, IP counseling and management of IP portfolios in the field of electronics, optics, physics, telecommunications, and software. Mrs. Mehta previously worked as a bring-up engineer at IBM in Austin, Texas, and as a digital signal processing engineer at Texas Instrument before joining the legal profession. She may be reached at mehta[at]oshaliang.com.