- Posted on: Feb 11 2015
NDAs are always a good idea in theory – however there are many investors and corporations that will either not sign an NDA (and you lose an opportunity), or who will present you with an NDA so flimsy that it means nothing (the latter is more common).
Bearing this in mind there are a few options:
- Get the best NDA you can signed by the reviewer. For people you trust – this can be a good option. Remember that NDAs are not too hard to circumvent however as a practical matter – so if it is a larger company in the same field it may not be worth much. For example – Bob, the CEO of XYZ can sign an NDA, you share, he tells Joe a friend at another company where Bob happens to won 49% of the shares. The other company makes your product – and is not subject to the NDA. You would have a well nigh impossible time tracing the source.
- Protect your IP before sending a pitch deck. This can be costly and if you are on a tight budget it might not be possible. Ideally, filing patents if there is patentable material, copyrights on source code, and even art in the GUI or brand, and filing for a trademark of the proposed brand are all substantially better than a simple NDA – but also more expensive. This however is usually the best option when you are shopping a licensing deal, or joint venture with another company in the same space. There are some less expensive routes here (such as a provisional application instead of a utility patent – which gives you a year of coverage, and copyright and trademark are both relatively inexpensive – in the hundreds of dollars – not thousands).
- Finally – the old entrepreneurial – take a huge chance / leap of faith and just share the info. Not a lawyer’s favorite thing to do but in the wild world of entrepreneurial risk sometimes it is the only way you can go if the company you are talking to won’t sign an NDA, but they are willing to hear your pitch. In this case my advice is to moderate what you share. If you can share broad concepts but not enablement you are helping hedge your bet and getting a toe in the door to the point where you can get them to sign an NDA perhaps. The reality is that if you are working with ethical people – you don’t need an NDA (but still get one if you can). If you are working with less than ethical people who would steal your idea – they will find a way to do it regardless of the NDA.
I hope this helps with that pesky and very difficult question “Do I need an NDA?” Never an easy answer, eh?
Call or email if you want help with the NDA, protection (patent, copyright or trademark registration) or just have a question about dealing with inventive IP in your business. I am way faster with email. firstname.lastname@example.org
Posted in: Intellectual Property