Business schools teach business ethics, and one of the first lessons is “do not hijack the ideas of others.” But life is different outside of academia, and people do not realize, or want to realize, that they are appropriating the dreams of others. A nondisclosure agreement (NDA) can protect against misappropriation and misuse of information.

Examples of Idea Hijacking

Businesspeople should be careful in engaging in business discussions without contractual protection. The risks can blind side them easily, especially if nonpublic information is shared. Take for example that foreign investors approach an emerging company in the United States and ask to be its first licensee in the Middle East for a $1 million. Although a great opportunity, for operational reasons, the company rationally rejects the offer. The foreign investors then explain, “if you do not grant us a license to use your name and business system, we will trademark your name in our territory and operate on our own.” A similar ploy occurs domestically, where after discussions, the new business is given an ultimatum, “offer us a joint venture or we will operate a knock-off of your business.”