
Reasons to Drop NDAs - tiffani
http://www.contrast.ie/blog/five-reasons-to-drop-ndas/
======
grellas
It all depends on what one means by "nda."

If it means the piece of paper people ask you to sign before giving you a
pitch, the author's points are largely well taken.

On the other hand:

1\. If a company fails to have its employees sign nda's, it potentially
jeopardizes its trade secrets (to protect something as a trade secret, an
employer must show that it took reasonable steps to treat the proprietary
information as trade secret information and having employees sign nda's is a
key component of this).

2\. If a supposed suitor approaches you about buying your business, and you
fail to sign an nda, then the information disclosed in the buying process -
which can include your most intimate and valuable business techniques and
plans - can potentially be lifted by the would-be suitor and used
competitively against you after the suitor abandons the deal.

3\. If you attempt to negotiate a potential strategic partnership, and you
trade proprietary information relating to what would be a valuable joint
venture, and do so without an nda, then, again, the prospective partner can
betray you and use your valuable information against you.

4\. If you let your sales people develop all of a company's leads in their own
name and using their own resources, without confidentiality agreements (i.e.,
nda's) acknowledging that the customer information is valuable proprietary and
confidential information belonging to the company, you leave your company
exposed to having its customers raided without any legal recourse. Are sales
people prone to do this? Absolutely. They tend to think of customers as
belonging to them and not to the company. Without the basic legal protections
afforded by nda's, a company runs serious risks of losing its customer base to
those who might chose to raid it.

5\. Other examples could be multiplied, almost ad infinitem, depending on the
particular business context, of how it is positively naive and, indeed,
stupid, to proceed in various business dealings without benefit of the legal
protections needed to protect confidential and proprietary information, that
is, without an nda.

While I think the author's basic points make perfect sense in the fast and
loose world of "pitches," they are not generally applicable in the world of
startups. As long as there are business dealings in which any party has
valuable information that it wants to keep secret, nda's will continue to
serve valuable purposes and are necessary and, indeed, indispensable to the
transactions involved. This is from the perspective of one who has specialized
in business startup law in Silicon Valley for the past quarter century.

------
bretpiatt
[Note: This is the perspective of a Product Manager & Technology guy, not a
lawyer]

NDAs are not for "hey we have an idea we'd like you to hear about" and they
are frequently misused for that. This just sets everyone up for legal issues
and hurt feelings later -- when you tell somebody an idea they may have
already been working on it -- you then end up in a prior art mess.

NDAs are not something you should ever put into the CRM workflow for your
sales people as a measured objective, i.e. I've seen quotas of, "Get 20 leads
to sign an NDA, get 10 POCs, get 5 sales." If you can't tell me about the
features of your product without an NDA I'm not going to understand the
product after I sign it.

NDAs make sense if you have an established relationship and you're working on
something pre-patent or trade secret work together. NDAs also make sense if
you're hiring a consultant to come in and help with marketing, business
planning, etc.

~~~
keltecp11
Guy Kawasaki has a great article - [http://www.thestartuplawyer.com/venture-
capital/guy-kawasaki...](http://www.thestartuplawyer.com/venture-capital/guy-
kawasaki-on-ndas)

------
snprbob86
This is the best point: "they all say what they want to, whether or not
they’re under an NDA"

I've got a friend at a particular large game studio, working on a particularly
popular Xbox 360 title. He is extremely tight-lipped about his work projects.
It certainly isn't because of his NDA because we have builds of the game in
our test labs. My job enables me to walk in and see them anytime if I really
wanted. He keeps his mouth shut and I don't go prying simply because it makes
us feel good.

Surprises are often a competitive advantage, especially in gaming. He doesn't
want to ruin the fun of the big reveal for himself, his co-workers, the fans,
or anyone else. The NDA is a formality; if management ever has to remind them
of it, everyone is saddened that someone is spoiling the competitive and
customer-pleasing fun.

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ggruschow
I wish this all held true for pre-patent work.

------
jhancock
I was told by patent lawyers that as soon as you expose your product to those
not under non-disclosure (and a piece of signed paper is the best way to prove
those exposed are under non-disclosure), the clock starts ticking on your
window to file your provisional application.

~~~
tiffani
Clock indeed does start ticking. I remember some patent lawyers I talked to
during college saying you had a year after disclosure to get your application
together. The sooner the better, obviously.

~~~
jhancock
yes, that's how I was trained as well.

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keltecp11
All you need to know about the NDA today -
[http://www.docstoc.com/docs/16875061/The-Risks-and-
Current-P...](http://www.docstoc.com/docs/16875061/The-Risks-and-Current-
Position-Of-The-Non-Disclosure-Agreement)

