What is all of the fuss about NDAs?
Non Disclosure Agreements are also known as;
– Privacy agreements
– Secrecy agreements
– Confidentiality agreements
They are supposed to afford the signatories the piece of mind that their discussions are safe and that neither party will (or can) use the other’s intellectual property without the owner’s consent. NDAs can be one-way or mutually applicable.
Or, so goes the theory.
It is obvious as to why inventors and business owners want to take NDAs with them everywhere they go and refuse to talk to anyone without their signed paperwork in order. They want to make sure no-one steals their idea or their strategic first mover advantage.
But an NDA is much like a patent, it offers you the right to protect yourself, but it doesn’t protect you. If you have a patent and a company produces a product that infringes on your patent they don’t automatically get in trouble and have to cough up a fat cheque to apologise to you. Quite the opposite in fact, it will cost you a pretty penny to hire a lawyer to take the bad guys to court. It is exactly the same for NDA documentation.
An NDA affords you the right to protection, but you have to be able to afford to protect yourself.
For the sake of the argument lets say you have a mate who is a hotshot lawyer and will fight your corner if push came to shove… what would make a good agreement? Is there a standard NDA that you can use?
This is a grey area. Your NDA should fit the purpose you intend to use it for. You should get professional advice and have one drawn up for the purpose of your discussions where you feel you need protection (i.e. investors, potential partners /potential competitors, suppliers, designers, parties tendering for work etc.). Usually that will cost between £200 and £800 pounds. There are templates out there available if you can’t afford to layout the cash right now.
The story doesn’t end there… when handing over your NDA / CDA / whatever you want to call it, be careful. Consider the other costs involved. How much trust are you instantly destroying? Are you creating barriers where there need not be any? Are you getting partners backs up before you’ve even started working with them?
Some parties, lots of investors in particular, won’t sign confidentiality agreements. This doesn’t, however, mean you can’t trust them.
That may sound counter intuitive, but think about the scenario from their perspective. As a successful investor with a proven track record of turning ideas into reality you get approached by loads of people saying they have just had the best idea since sliced bread… but a lot of these ideas, regardless of what an “inventor” may say, are not original or unique. A lot of the ideas that you may be approached with may, in fact, be very similar. Signing an NDA may mean that if you invest in the third person that comes to you with an idea, as you believe their team is better, or that they understand the marketing better, or for whatever reason, you leave yourself open to being sued by the first person you met with.
Also, think of this, as an investor you already have investments in lots of different companies, some of which may already be working or about to begin working on ideas similar, if not exactly the same, as the ideas that people pitch to you and signing an NDA may open a can of worms that you really don’t want to be dealing with. And, you want respect, you want the person pitching to you to trust you – don’t they understand that if you steal their idea your reputation will be shot and no-one will come to you to get investment?
So, should you have one? Yes, maybe now, maybe later.
Confusing? Of course it is!
Luckily FIG is on hand to save the day, or rather, FIG’s Strategic Partners are on hand to save the day. If you decide to enter the FIG process then we can introduce you to our lawyers, IP experts, confidential prototype designers, accountants and investors who really know their stuff. They can tell you what (if any) IP protection you need and how to go about getting it. They will even give you this consultation for free (and if you are lucky, FIG may even foot the bill for some follow up work).
See, lawyers can be useful, despite whatever divorcées may say.
And… What about FIG? Does FIG have an NDA?
Yep, fit for purpose. We take sensible measures to protect our IP and your IP. We also protect the IP of our investors, FIGureheads and FIG Strategic Partners…
If you think you have a headache now, try getting your head around the minefield we lumbered ourselves with!
The FIG privacy information, confidentiality stuff, etc. can be found in the links in at the bottom of the web page. The gist of it is;
We don’t share anyone’s information unless they give us the green light to do so. We track everything that goes on through the website, so that if there is ever a dispute we can provide fair and honest records to any parties involved.
End of story.
We figure that it is a fair, responsible and effective way to do things for all stakeholders.
In summary, unless they are fit for purpose, NDAs are often not worth the paper they are written on. By working with FIG you can check to see what protection you may need and set about getting suitable protection in place.
If your idea is in concept phases and you are running about handing NDAs you may well be putting backs up left, right and centre.
To be brutally honest, if you feel you need an NDA when you speak to someone about your idea, then you probably shouldn’t be speaking to that person in the first place.
Be warned: You may have to trust someone and take a risk!