BEWARE OF THE UNSOLICITED IDEA - Strategies for avoiding risk

 Businesses often receive through various channels unsolicited ideas for products and services. These  ideas may come from customers, partners or other third party interactions. The risk is that the idea resembles a product or service currently being developed or developed in the future and the person or entity that made the suggestion claims to have rights in the developed product or service.


The best protection is for businesses to develop a policy that monitors and regulates receipt and internal distribution of unsolicited suggestions. In order to make this policy more effective, documentation of product development should be routinely prepared and maintained. This would be useful to counter a claim that such unsolicited information received was used in the development.

Some companies try to pro-actively avoid this problem by routinely entering into an anti-proprietary/confidentiality agreement with third parties. Such an agreement states that no information disclosed between the parties is proprietary or confidential unless the parties agree otherwise in writing. Similar terms can be placed in customer agreements which state that all suggestions that relate to a company’s products are not proprietary or confidential and can be used without limitation on a royalty-free basis.

If a suggestion is received in an unsolicited manner, then the business should promptly respond stating that as a matter of policy the business does not want to receive any unsolicited suggestions and that any such suggestions are considered by the business to be not proprietary or confidential, unless otherwise agreed in writing.

No policy can eliminate the possibility of future claims, but can reduce such possibility.

Bottom Line: Businesses should develop a policy regarding handling of unsolicited ideas, which includes monitoring the receipt, distribution and use of such ideas, and notification to senders that the business treats all such ideas as not proprietary or confidential.

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William Galkin manages GalkinLaw. Mr. Galkin has dedicated his legal practice to representing Internet, e-commerce, computer technology and new media businesses across the U.S. and around the world. He serves as a trusted adviser to both startup and multinational corporations on their core commercial transactions.


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