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How can my protect my startup idea?

San Jose, CA |

I have a concept and am looking to hire/work with web developers. How can I tell them about the opportunity without having them run off and start the application on their own? Will an NDA do anything?

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Attorney answers 7

Posted

Speak with an atty in private regarding your idea and NDA and he or she can best guide you on how to protect your ideas. A NDA is better than not having one. My experience in dealing (consulting and legally advising) with start up businesses and studying entrepreneurs is that your worry is common. Good luck to you.

Answer given for general advice and is not a legal opinion, which would require an analysis of the facts and circumstances as well as the applicable law and regulations.

Posted

Your question has been asked and answered many, many times. Visit the link below. You should read those questions and answers, follow the suggestions you find persuasive and then speak with a California-licensed business attorney [who will bring in an intellectual property attorney when appropriate]. Good luck.

The above response is general information ONLY and is not legal advice, does not form an attorney-client relationship, and should NOT be relied upon to take or refrain from taking any action. I am not your attorney. You should seek the advice of competent counsel before taking any action related to your inquiry.

Posted

An NDA is better than nothing but in my experience the effect is more psychological than legal, with a few exceptions. Other attorneys may feel differently.

The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here.

Bruce E. Burdick

Bruce E. Burdick

Posted

I don't feel differently.I think Attorney Doland has this right. An NDA is what you need and what you should get. When you deal with suppliers to you, YOU have the money and YOU can call the shots. that is unlike when you are talking with a potential investor or potential purchaser, as then they have the money.

Posted

You could start with a nondisclosure agreement. See LegalZoom.

My answers to questions are for general purposes only and do not constitute legal advice or establish any attorney-client relationship.

Bruce E. Burdick

Bruce E. Burdick

Posted

OMG, Legal Zoom? Really? that's a way to zoom into legal trouble.

Seth S. Gaskins

Seth S. Gaskins

Posted

Relax Bruce. I was only joking.

Posted

Another important legal aspect to be aware of is so-called “work made for hire”. Most likely the webmaster you hire will be a freelancer rather than your employee (in legal terms that is). This may potentially lead to a situation when the webmaster and not you owns the copyright to your website. You should consult with an IP attorney about how to structure your relationship with the webmaster such that you remain the author of the website.

Pearlette Vivian Toussant

Pearlette Vivian Toussant

Posted

Excellent point.

Bruce E. Burdick

Bruce E. Burdick

Posted

Hippos point, yet it's actually a copyright assignment that's needed from the webmaster as this may not be one of the types of world that qualify as a work for hire under 17 USC 101. So, best you use a copyright attorney to get the precise language you need. This can be crucial as copyright assignments and work for hire agreements must be in writing to be effective.

Bruce E. Burdick

Bruce E. Burdick

Posted

funny error "Good" not "Hippos"

Posted

Are You Planning on Opening a New E-Commerce Website?

There is much you need to know as you begin your new business. I suggest you do not attempt to write your own legal policies. This is not where your training and background lie, and though you are probably as smart as an attorney, you do not have their experience.

Below is a checklist for legal issues I use for new e-commerce clients.

1. Business Model – Is your idea viable as a web based business?

2. Business entity - Are you going to be a C corp, a sub-S, an LLC or a sole proprietorship?

3. Terms of Service - This is your contract with your visitors and is the most important item for any e-commerce site. A little work here brings big dividends in the future.

4. Privacy Policy - Every e-commerce site needs a privacy policy!

5. FTC guidelines - The FTC has been regulating business advertising for almost a century. All of their advertising guidelines apply to e-commerce sites.

6. Domain Name issues? Is your name available. Can you create a Trademark?

7. Trademark - Do you have a brand name free from conflict? Should you start with just common law rights? Should you register the mark, and when?

8. Copyright - If it is on the web, it already belongs to somebody. Did you buy a license for the images you are using?

9. Do you need a DMCA policy?

10. Web Site security issues?

11. Do you need and have an EIN? You can get that for free.

12. Do you need an arbitration clause?

13. Do you have employees? - If so you need written policies regarding their authority and use of the internet.

14. Do you know the difference between a "browser wrap" and a "click wrap" and which do you need?

15. Are you abiding by the Child's Online Privacy Protection Act (COPPA)rules?

When I discuss this list with clients other issues arise. Finally, I always discuss with my clients their need for good accounting services. An accountant's advice as you start up can save you many dollars in tax that you might not save if you wait to speak to an accountant until your first tax return is due.

I hope this list will give you pause to think about those issues for which you might need to seek professional advice.

You may want to discuss your situation with a lawyer in more detail. Most lawyers on Avvo, including myself, offer a free phone consultation.

This post is provided for general informational purposes only and is not intended to be legal advice specific to you. This general information is not a substitute for the advice of an attorney in your jurisdiction. The attorney client relationship is not established by this post.

Posted

An NDA will impose a burden on the web developer to keep your trade secrets in confidence, to the extent the NDA specifies. NDA's, also commonly called secrecy agreements or confidentiality agreements, usually have exceptions in time, scope and territory and have exclusions as to prior art and government mandates.

A more important agreement for you will be a NUA or NCA (non use agreement or non-competition agreement) if you state law allows one or both. What you really want is the web developer not to use your information to create a website that destroys the value of your information.

So, for example, Amazon came up with a concept of a "one-click" shopping feature to simplify purchasing their listed products. Until it was implemented, it was a trade secret and the fact that Amazon was working on such a concept was also a valuable trade secret and when they planned to have it implemented was an important trade secret and how it would be implemented was an important trade secret. Once Amazon had a working concept, they quickly filed a patent application for what was now "reduced to practice". And then, they launched it with much fanfare and Barnes & Noble quickly came up with and launched their own version. So, just in the middle of one Christmas season Amazon sued Barnes & Noble and got an injunction that really disrupted B&N and took them out of the major season at the start of their online site. Amazon now dwarfs B&N. Although the patent was ultimately found invalid for obviousness, the NDA's involved and the patent that followed them were a crucial IP strategy that paid huge dividends for Amazon and that made the IP law group at Perkins Coie [Seattle law firm] a fortune as others sought to get similar successes.

I am not your lawyer and you are not my client. Free advice here is without recourse and any reliance thereupon is at your sole risk. This is done without compensation as a free public service. I am licensed in IL, MO, TX and I am a Reg. Pat. Atty. so advice in any other jurisdiction is strictly general advice and should be confirmed with an attorney licensed in that jurisdiction.

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