Binder MED

Confidentiality Agreements and Your Medical Device Idea (Free Template)

How can you protect your idea? I regularly advise clients on the importance of protecting your new medical device ideas and how that relates to your investment in developing them. My general recommendation is protecting your idea as a 2-tiered approach. First, establishing Confidentiality with anyone you share your idea with and Second, pursuing patents. The focus of this article will be on Confidentiality (CDA, NDA, etc.).

You may have an idea that you feel is not patentable or you may not want to expend the cost of patents right away. However, below are just a handful of reasons you will still want to establish Confidentiality.

During Early or Pre-Development

  • You could be first to market with an idea
  • Your idea involves trade secrets
  • You are still developing the final solution
  • You don’t want competitors to know what you are doing
  • You need time to perform market research
  • You are raising funds to develop the idea
  • The engineering firm you hire may come up with a patentable solution

Later in the Development Cycle

  • Early user feedback
  • Results of Market Research
  • Preliminary Mechanical / Biomechanical Testing Data
  • Animal Study Results
  • Proprietary Manufacturing Techniques and Processes

Confidentiality Agreements and Patents. Inventors only have one year from Publicly disclosing an invention and related information to filing a patent. The logic here is that patents need to be novel and public ideas that are more than twelve months old are no longer considered novel to the US Patent Office. In some countries you will lose patentability immediately upon Public disclosure and disclosure can be via written OR oral communication. So if you don’t think there is anything to patent (there may be) or you are not ready to file a provisional now, this further emphasizes the need to engage in a Confidentiality Agreement. This will establish the disclosures to be private, NOT Public.

The Anatomy of a Basic Confidentiality Agreement. Whether it is a CDA, NDA, MNDA, or Non-Use Agreement… I have seen them more than ten pages long, be generally biased to one party, and be overly complicated. Below is a diagram of the current Agreement that I put together and use regularly. It is a single-page Mutual Agreement of Confidentiality and Non-Use. There are certainly more comprehensive (longer) Agreements available online or from your attorney but this one is easy for me to explain and I feel it protects both parties relatively well. No matter what, you need to consider any Agreement only as a deterrent for the other party. It is similar to a patent in the sense that you will be responsible to enforce the terms of the Agreement. So, if you don’t generally trust someone (or entity), you are probably best not to disclose anything, whether you enter an Agreement or not.

TIP: Just because you get an Agreement in place, still only disclose information necessary to communicate the idea effectively and nothing more. If you have filed a patent, share the filing number to confirm that it has been filed, unless there is a licensing offer on the table avoid sharing the actual claims or patent drawings.

A few important points in this Agreement:

  • It is a Mutual Agreement. Both parties can be Disclosers and Recipients of information. Companies may want to share confidential sales info or future development strategies with you and this allows them that flexibility.
  • The Disclosure period is defined as three years from the Effective Date but covers information disclosed two months prior to the Effective Date.

The information disclosed during the Term must be kept confidential indefinitely. Many Agreements only ask for Disclosures to be kept confidential during the Term.
Binder MED
If you would like a high-resolution PDF of this Agreement message me, ask for it in comments or provide your email and I will send you a copy. Disclaimer: I am not an attorney so feel free to have it reviewed by yours before using.

Binder Biomedical, Inc. is a full service product development firm with specific expertise in developing orthopedic / spinal implants and complete instrument systems. We can take a project from a sketch to commercialization and everywhere in between. We often partner with companies and individuals to offset development fees.

Contact me for more information about how I can help with your medical device product development needs. – Lawrence Binder

This information is for reference only and not to be considered legal advice. We recommend that you work with one of our partner attorneys or your own when making important legal decisions.