Legal Question in Intellectual Property in New York

Re: Hi, I have a great idea that I want to start up

You face the classic entrepreneur's problem: a great idea can only be monetized by sharing it, but sharing it often permits others to copy it.

The solution -- to the extent there is one, and it's not perfect -- is a Non-Disclosure, Non-Compete Agreement ("NDA"). This is an agreement whereby the owner of the idea agrees to disclose it to the recipient in return for the recipient's promise neither to reveal the idea to third-parties or to compete with the owner in the same business.

The reason the NDA is an imperfect device is that if the recipient does violate it there is no way to undo the harm: once disclosed to a third-party who is not under contractual obligation to keep it to themselves, the third-party is free to further disseminate the idea and to compete in the business. If the third-party knows the recipient of your idea under the NDA is in fact bound by the NDA that third-party will likely face some liability for further dissemination though not necessarily competition. But, either way, you can't "unring the bell." Once the idea is out, it's out. You may get some kind of damages but they're nearly impossible to prove so monetary recovery is typically out (particularly given the cost of litigation). More likely, the courts will limit themselves to issuing an order to the recipient and any third-parties to the effect that further dissemination of the idea is barred.

You should be heartened by the fact, however, that good ideas are rarely recognized as such by those with whom you may enter an NDA. Additionally, there's the oft-cited truism that an NDA is essentially worthless as those who would enter it as recipients if they are honorable need not be bound by it to preserve the confidence, and those who are dishonorable will not be stopped by it.

The language in the NDA will be dictated by the nature of both the idea and the purpose for which you are disclosing it. If your idea deals with copyrightable, trademarkable or patentable material you can also take other steps to protect yourself.

Due to the importance and weirdness (as discussed above) of NDAs, they should be at least reviewed if not authored by an attorney. They essentially grant rights in ideas by limiting them and therefore are central to an entrepreneur's ability to monetize those same ideas.

Re: Hi, I have a great idea that I want to start up

You're very wise not to state your idea here on this public board; continue to keep it under wraps until you speak in the traditional, in-office setting with an intellectual property attorney personally.

You're welcome to contact my office if you wish; I'm in Schenectady, very close to the train station (easy walking distance from Amtrak). I get to the City fairly often.

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