The real question is how much money do you want to spend to protect your idea? The more money you spend, the stronger the protection you will get. It is important to note that until you file a provisional or non provisional application the only protection you have is trade-secret protection. Trade-secret protection is a just as strong as a patent and if used properly and sometimes even stronger legal protection. This is because trade secret protection lasts forever as long as you follow proper secrecy procedures. One of them is that you have to keep your invention secret, i.e. do not tell anyone, just like the coca cola formula. Then you wonder, how do I tell investors? The answer is you use a confidentiality contract (NDA). This is contract usually governed by state law. An NDA is fairly inexpensive, but protection with and NDA by itself is weak. First, once the cat is out of the bag, it is impossible to get the cat back in the bag and you have to sue on the contract alone. Second, if the contract not drafted and executed properly it can be weak and the investor will have many contract defenses, basically stealing your idea. The next least expensive way to secure your idea is to file a provisional patent application and get "patent pending" status. The problem with provisional applications are that unless all the information that is in the provisional is claimed in the non-provicional and finally granted, that information is lost if disclosed. Usually the idea in the provisional is very raw, basic and is usually not drafted with completeness. Anything outside of it will be gone. The best and most expensive way is a combination of a non-provisional patent and a trade-secret protected NDA contract. On the patent application you have to disclose your invention as a whole and if properly drafted many alternatives embodiments and very broad claims. Another advantage is that in 18 months you will have a published patent application that you can show you investors to create more interest. The NDA will protect any, collateral know-how not disclosed in the patent application. A happy marriage. One last thing, a lot of investors knowing the liability of un-patented ideas will be reluctant to talk to you.
Answered on Aug 12th, 2011 at 9:47 AM