For startups, a tension frequently arises between the need to protect an innovative concept via patenting and the needs to prove market demand, verify manufacturability, and/or raise funds from investors.
For example, is it safe for a startup to share its innovative concept with a potential investor prior to submitting a patent application claiming that concept? Maybe. But the risk is much lower if the investor first signs a Non-Disclosure Agreement. Yet many investors are reluctant to be legally bound to confidentiality for fear that they won’t be able to become involved with (e.g., discuss, evaluate, and/or invest in) an even remotely similar concept offered by a different company.
So what’s a startup to do?
As another example, is it smart for a startup to disclose its innovative concept to potential customers to gauge their interest, possibly integrating their feedback to create better fit between implementations of the concept and those customers’ needs? At first glance, it sounds like a great idea. But what about disclosing the concept before the startup has submitted a patent application properly describing the concept? Even that should be fine if each customer signs a Non-Disclosure Agreement (and the 1-year bar/grace period is kept in mind).
But what if the customer won’t sign?
Usually, an innovative concept can be described at any of several levels of specificity and from any of several perspectives. For example, one could tout the benefits of an innovation without describing its “secret sauce”, i.e., precisely how it achieves those benefits. As another example, one could describe the innovative concept so vaguely that even an expert still wouldn’t know how to implement that concept.
With these approaches, even if a customer or investor learns something about your innovative concept, they nevertheless won’t know enough to accidentally (or intentionally!) empower the filing of a competing patent application or create novelty-defeating prior art.