Reading time: 4 minutes

You are entering into an agreement with a client for them to provide your business with a product or service. How can you protect your intellectual property and make sure the potential client does not steal your ideas and start their own business? Requiring potential clients to sign an NDA (Non-Disclosure Agreement), including intellectual property clauses in your contracts and protect your intellectual property beforehand is the best thing you can do to ensure this doesn’t happen.

What is an NDA?

A Non-Disclosure Agreement, also called a Confidentiality Agreement is an agreement that sets out that the kind of information that you wish to protect. This can include trade secrets, confidential information and intellectual property. You need to set out clearly what information will be covered and when disclosure of that information to third parties will be considered a breach of the NDA.

Generally the NDA will provide protections against the misuse of the information, provide information as to what will be considered a breach of the agreement and how this will be dealt with, for example through seeking compensation or damages. An NDA may also set out a timeframe for the length of the agreement and how the confidential information will be returned to you once the agreement has finished.

A situation where an NDA would be useful would be if your business has a revolutionary idea for a type of phone app. You need an app developer to help build your idea but you do not want them to have the ability to simply take your idea and use it for themselves. You would look at entering into an NDA prior to negotiating with them and commencing work to develop your idea.

Contractual Protections

Many contractual agreements have intellectual property clauses within them to prevent a client from being able to use your intellectual property in a way you don’t want them to. For example, you don’t want the app developer you hire to be able to then use your intellectual property in apps they create for other people. Similarly, the app developer does not want you to be able to use their coding and software to go off and create more of your own apps.

This is where clauses in your client agreement protect your rights to your intellectual property. In this situation, you can either licence the app developer to be able to use your idea or you can assign your intellectual property to them. But what is the difference?

  • Licencing – is when you allow the other party the ability to use your intellectual property to fulfil their part of the agreement but you still retain ownership and all of the rights associated with it. You can set out the kind of licence they have to use your work and when it expires.
  • Assigning – is when you transfer full ownership, rights and title of your intellectual property to the other party and you no longer retain any interest in that property.

In this situation you would licence your intellectual property to the developer so that they can create your app, and have a clause that states that the finished product will be assigned to you, so that you then have full ownership of your app can do what you like with it without any restrictions.

Different Intellectual Property Protections

Finally, there are protections you can put in place before you enter into any agreements with clients or service providers to protect your intellectual property. These include making sure your IP is covered by the following:

  • Patenting any of your inventive devices, substances or methods;
  • Using copyright to protect your original works of expression;
  • Registering a trade mark for your unique branding and logos; and
  • Registering any of your original and distinctive product designs.

Conclusion

LegalVision’s specialist IP and Trade Mark lawyers can help you get the best protection for your business when dealing with clients and contractors. Contact us today on 1300 544 755 for an obligation-free consultation with our Client Care Team!

Webinars

Australia’s Global Talent Visa: How to Attract Top Talent

Thursday 7 October | 11:00 - 11:45am

Online
Understand how to navigate Australia’s complex migration system to attract top overseas talent with our free webinar.
Register Now

5 Essential Contracts for your Online Business

Thursday 14 October | 11:00 - 11:45am

Online
Learn which key contracts will best protect your online business with our free webinar.
Register Now

Key Considerations When Buying a Business

Thursday 11 November | 11:00 - 11:45am

Online
Learn which questions to ask when buying a business to avoid legal and operational pitfalls, so you can hit the ground running. Join our free webinar.
Register Now

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. From just $119 per week, get all your contracts sorted, trade marks registered and questions answered by experienced business lawyers.

Learn more about LVConnect

Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

Our Awards

  • 2020 Excellence in Technology & Innovation Finalist – Australasian Law Awards
  • 2020 Employer of Choice Winner – Australasian Lawyer
  • 2021 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review
  • 2021 Law Firm of the Year - Australasian Law Awards
  • 2019 Most Innovative Firm - Australasian Lawyer