An NDA is an agreement in which you agree to disclose certain information and a third party agrees to keep that information confidential. An NDA can be one-sided (only one party gives open information) or reciprocal (both parties give information). NDAs are useful tools if you can have one and when you really need it. It is not possible to ask everyone you are talking to to sign an NDA and it would seriously disrupt your efforts to launch your idea. In fact, if you are talking to an angel investor or venture capital firm, they might refuse to sign an NDA until you are in serious discussions. Instead, you can start by discussing your idea in general terms to better understand the market and see who is doing similar things. They will be able to better detect potential competitors, as well as potential partners and customers. The story goes that ibm, when he developed his first PC, contacted Bill Gates to develop an operating system. IBM also spoke to Gary Kildall, a more experienced software developer. The people of IBM and Kildall were negotiating NOAs, each refusing to sign the other NOAs. IBM finally had enough and returned to Gates, who apparently signed IBM`s NDA without hesitation. The rest is ancient history.
The moral of the story is that NDAs can be useful, but they can also be on the way to achieving your business goals. So you have a great idea that meets the needs of the market, and you are involving others. But you don`t want anyone to steal your idea or your plans. One solution is to use a confidentiality agreement (“NOA”) with your business partners and potential suppliers. If you are willing to discuss the “how” and all the details, then you should use an NDA where practical. Others may have seen the same opportunity in the market, but have not found a viable solution. The exact nature of your solution can be very valuable and you should have an NDA before sharing this information with third parties. We invite you to meet with a Varnum lawyer to discuss how we can help you achieve your goals.