Tip:
Highlight text to annotate it
X
Hi. I'm technology and business attorney Craig Delsack, and today's frequently asked question
is: When do I need a Non Disclosure Agreement?
Let's say you have a brilliant idea for a revolutionary product. You want to attract
potential investors and partners but still protect your light bulb moment from being
stolen away. No problem, you think. I'll just get myself an NDA.
Well, I say stop right there!
NDAs serve a purpose. They protect confidential information and trade secrets.
But let's look closer. These are people you've never worked with before. Isn't it a little
too early to reveal your secrets and give them "a peak under the komono?"
Consider demonstrating your technology without disclosing your "secret sauce." If the demonstration
gives it away, then show them something else -- such as the problem that you're seeking
to address.
When you are more confident about your partners and ready to get serious, that's the time
to consider your NDA.
Here are the three most important things to keep in mind when considering an NDA.
1. Never rely on a "form" NDA. They are trickier than you think. I've seen NDAs that prohibit
disclosure of your secret BUT DON'T prohibit usage! So you think you're protected -- but
you're really not. Always get a lawyer to review your NDA and draft one for exactly
what you want to protect, and how.
2. Distinguish trade secrets from confidential information. They are NOT the same thing.
TRADE SECRETS ARE THE MOST VALUABLE CONFIDENTIAL INFORMATION OF A BUSINESS. One has an expiration
date. The other needs to be in effect forever. Trade secrets are generally described as those
things that have an economic value to a company which it takes reasonable steps to keep secret
(like the formula to Coke).
3. Whenever possible, avoid revealing trade secrets. When they're out, they're out. You
can't put the toothpaste back in the tube!
I'm Craig Delsack, business lawyer, technology lawyer, media lawyer and IP lawyer, and, remember
-- Your ideas are as free as the wind, unless you hire the right lawyer.