How To Protect Against Technology Thieves

It’s simple.  Sit where they can see you and tell them why you would taste good.

If you are in the technology or intellectual property development game, please… you need to heed the dire warning represented by the tragic story in the must-watch video I have embedded below.  A local business, here in Frederick, has recently had their technology duplicated by the people they shared it with – in fact by the very government agency they thought was going to be helping them develop a market.  I have seen this enough times that I can only say NDA, NDA, NDA!  Whether you are talking to VCs, Advisors, Consultants, Contractors, “Partners”, Sponsors, Potential pre-release Customers, possible employees, Government Agencies that you think could help you develop a market, etc.  If you don’t have an NDA your mouth should be s-h-u-t shut!  When it comes to the “how” you are doing what makes you special this is your secret sauce and you need to be very careful about where you spread it.  You don’t share your processes, algorithms, source code, designs, methods, or anything else without an NDA… and a serious one at that.  If you are sharing the critical items, NAME THEM in your NDA.  A generic NDA is tough to enforce… “We saw it somewhere else, or were also working on something similar internally”.  Get them to agree that these things are not a conflict for them in general, in advance of disclosure, and in writing.  If they won’t do it, slow down.  The desire to impress people with your brilliant ideas, or garner their help in reaching the masses can blind you to the real reason you were invited to this party… main course.

Trust is something you should dole out very carefully.  And you cannot simply rely on patents.  Think about it.  Patents force you to reveal your proprietary methods, and they become public record, so if you sit down and explain your market, approach, the need, and how you solve it to someone and then say “it is patented” you had better have the legal budget to defend that patent and its integrity.  I am not saying there is never a case where you need to take calculated risks, but they had better be very well calculated.  I also do not mean to make light of Doctor Becker’s plight.  Rather I am hoping to draw attention to it to help his cause and also to use it as a warning to my fellow entrepreneurs, to slow down and give yourself time to think.  Nothing worthwhile ever really got cancelled because you wouldn’t disclose your deepest trade secrets without a real enforceable relationship being established first.

I am also not saying the FDA did anything legally wrong here.  I am not a lawyer and I was not a party of any of this.  However, I can tell you from experience that the Federal Government must be viewed as a potential competitor when it comes to trade secrets. The government, like any organization or individual has its own interests to consider.  Your job is to protect yours.

Bottom line.  If you are a small biz building IP, unless you are absolutely sure that you are sitting down with people you can trust…  KEEP YOUR SECRET SAUCE… SECRET!  Surprise the world with your product, and avoid the surprise of being second to market with your own idea that you shared with the wrong people.  Remember an agreement is only as good as the people that sign it.  Yes, if it is well drafted you can enforce it, but you are still trying to get the genie back into the bottle.  Government agencies, unfortunately, are not spending a lot of time educating their employees about the ethics around technology “reuse”.  In fact some laws on the books actually erode your IP rights when you sell to the U.S. Government and that is why a lot of the software contracts I read have a lot of extra language specific to the government.

The U.S. Government is filled with great people, and can be a great customer.  It also (like any large organization) has a lot of very unethical people working within it as well.  Many an entrepreneur I know has gotten excited when they get their first big meeting “with the people who control this space, and they could make us a standard” only to later find that they took the idea to a larger, better funded competitor and asked them to make it viable for them, or likewise found that their certain champions really did think it was a great idea, so great they felt they should copy it internally.  “After all, we have a guard gate up front… who will ever know?” But I have also seen companies create competitors for themselves by sharing the core of their technology with potential vendors, partners, or investors without a single bit of protection first being put into place and that is 100% their own fault.  They, perhaps unknowingly, asked to get eaten.

It’s great to eat with the big boys.  Just be careful to keep yourself covered.  After all, it’s no fun to get eaten.

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