Why You Should Bother About An NDA

Wondering how you could protect the concept of your future software? The simplest way is to enter into an NDA.

In case you have certain doubts about whether that game is actually worth the candles, you could read this article to get clarifications on multiple points concerning non-disclosure agreements. You’ll find out how possible conflicts could be avoided and how not to worry about the leakage. We shall start from the very beginning.

What the NDA refers to

A non-disclosure agreement represents a legal paper that is drawn up to restrict the dissemination of specific data that - according to this agreement - must only be available for the individuals who have signed that contract. The objective of a regular NDA is to designate what details shall be seen as confidential. Moreover, it also determines the areas of responsibility of each party in case of info disclosure.

It’s absolutely advisable to protect the information when it comes to the creation of a digital product since, under those circumstances, the leakage of details could actually lead to substantial financial losses.

What does the NDA serve for?

This kind of documents have several fundamental missions to carry out:

• enable the protection of data;
• prevent the revelation of secret info leak;
• cease the revealing of confidential particulars if it’s been disclosed;
• initiate prosecution in case the divulgence has happened and caused damage to the business.

What is implied by confidential materials?

Optimal implementation of your project will require the protection of various details, so non-disclosure information could be one of the following:

• records on clients and suppliers;
• private info of staff members;
• any part of commercial strategies;
• exclusive concept of merchandise;
• varied software.

You might be curious to figure out what advantages and disadvantages the NDA signing provides, especially, when it concerns the making and launching of digital products.

The key benefit here is a perfect opportunity to conceal specific confidential materials from the public. In case you bother to take care of such an issue, you manage to improve your chances of success.

Speaking of the disadvantages, you shall realize that it could be pretty tough to operate in secrecy. Then, to compensate for a certain level of stress, some developers (the ones you decide to hire) might want to increase prices for the service they agree to provide.

By the by, is it always so necessary to demand your developers to sign those papers? Let’s clarify the case.

Situations that require the conclusion of non-disclosure agreements

We’d like to specifically enumerate the cases when it’s pretty crucial to enter in the NDA:

• if you are in the process of whatever research, and you decide that it makes sense to stash the results you have received till the moment you ascertain the accuracy of data;
• once you have come up with a cool project, so you are looking for investors to present your startup to with the purpose of obtaining funding;
• when you are planning to build a digital advanced solution (for instance a new application concept);
• while you are proceeding with a project and you have to directly interact with the client’s personal records (and you would like to keep it private for a specified period of time).

Let’s get more specific to define whether YOU personally shall consider the NDA signing.

As a general rule, yes, you shall, in case you have come up with a one-of-a-kind concept of a project that you intend to breathe life into. You might even be 100% sure that your solution will definitely turn demanded in the niche you choose, but only under one condition: in case you manage to design and launch it to be the first platform of this type in the market.

What are you supposed to do in order to secure your idea under those circumstances? The non-disclosure agreement is the answer to your question because this document is to oblige outsourcing programmers you employ to keep the project’s particulars in secret, so your potential rivals won’t find them out.

Which points are mandatory to take into account to save your idea

Make sure you consider the essential aspects below.

• Unpredicted competition

Have you thought up a cool web/mobile application concept, being pretty sure that it’s one of its kind? Unfortunately, the thing is that you can’t be completely and entirely sure of that, since, ultimately, everything has already been worked out before us, and it’s truly challenging to create something brand new.

What we mean is that there’s always a chance that the team of designers will accept not only your project but also another startup that is pretty similar to your initial concept. Thus, it could happen that your finalized platform will enter the market almost simultaneously with the appearance of a competitive solution.

Would you like to prevent those undesirable circumstances? Then, you better think of an effective business plan ahead of time. On one hand, you can trust your startup to a respectable IT development agency that cares about their reputation, however, it’s better to remember about such a possibility.

• Absence of complete understanding of the responsibilities

It might happen that outsourcing developers reveal confidential data without malice. The dissemination can happen accidentally, due to an oversight. By the way, this is exactly what happened with the Apple company.

A daughter of one of Apple’s staff members has posted a video describing the iPhone X’s parameters, while that model was still in the middle of testing. The video was removed, but lots of the YouTube audience got a chance to watch it. That worker (his name is Ken Bauer) was dismissed.

Summing up that case, in the process of drawing up an NDA (for IT startups), make sure you explore multiple varients when valuable details could be disclosed. For example, a development agency could post an article describing the facts of a project they are currently working on, or maybe they might decide to put the client’s logo in their “Our Clients” category. You will never guess what can happen!

It’s the right time to specify what a reliable non-disclosure agreement is to include.

What specifically shall be included in the NDA to secure the info

#1. What precisely must be protected

The objective is to be as specific as possible to pinpoint what exceptionally relates to the secret info to be kept confidential. Your task is to explain what you are willing to protect.

Stating something vague isn’t what you are looking for, so add a maximum of specifics. You will need to provide practical examples of secret information, or you might want to simply indicate that all materials to be protected are located in specific cloud storage.

#2. Which particulars could be disclosed

It would be professional to add a clause which will stipulate what project records don’t refer to confidential ones. It means that there could be certain facts that are allowed to be revealed to the public.

Such clarifications will also help contractors better understand what data are mandatory to be kept confidential.

#3. Signatories, meaning the parties

That’s a must-have paragraph of each NDA, so the document is to point out who the parties of the agreement are. Those could be:

• an entrepreneur who provides specific data;
• a developer/development company that receives delicate details;
• some 3rd participants (for instance, staff members from the outsource, attorneys, and the like).

#4. Validity

If you intend to protect your unique concept, you have to figure out the duration of time your contractors are supposed to conceal the info. Shall it be one year or two, or maybe the whole 10 years? It’s up to you to decide. It’s critical to find some time to think through this chapter in the process of working on your NDA.

#5. Ways the information could be used

You shall take care of your app idea validation. We would recommend you thoroughly define all ways and cases when the outsource programmers have the right to take advantage of the materials you provide them with.

There could be even the need to list each task you decide to assign to them.

#6. Circumstances when data transfer is acceptable

Occasionally, while drawing up such an agreement for web/application development, it would be practical to imply specific approaches you would like to transfer particulars to developers you employ. Actually, you could specify that all the records which are communicated through a particular channel(s) have to be interpreted as confidential.

#7. Explanation on what disclosure means

The task is to be super precise on what shall be considered as an illegal revelation of info. Such a concept must be clearly denoted and written down in the doc. Traditionally, this clause shall concern information sale, intended/incidental revealing materials to third-party, and other similar cases.

#8. Instances when the divulgence is permissible

“I intend to secure the concept of my future application, thus, you must not disseminate to anyone the facts I give you!” - this is what people expect when they hear about a non-disclosure agreement. Though, individuals have to be aware of cases when contractors might not have any choice but to disclose some details. Moreover, in those cases, you shall not expect them to keep quiet.

As a rule, a bright example could be the collaboration with governmental departments, courts, and institutions like that. Everyone understands that such kind of entities can easily make everyone give out particular information.

In order to avoid any confusion, we would recommend you originally stipulate the cases when it won’t be a violation to reveal intimate info.

#9. Particulars’ return

After the order has been finalized by contractors, outsource developers are supposed to return all records they were provided with to complete the project. You have to specify how such a return shall take place. Thus, make sure you add such a paragraph into your contract, so contractors know what will be expected of them.

#10. Penalties

Obviously, we do hope that you’ll manage to find reliable contractors who will understand the necessity to keep your information a secret, but what should you do in case they disclose the data after all? What sanctions would you impose?

If you want, you could create your own ways to punish contractors, however, in most instances, those penalties imply paying fines.

As you understand, resorting to the country’s legislation might not always be helpful, thus, in case you don’t include the penalty chapter into your NDA, it would be pretty pointless to enter into one.

When NDA isn’t that critical

Everything we’ve spoken about above proves the necessity to sign this document. Still, there exist certain cases when drawing up such an agreement will increase your chances to suffer financially.

Particularly, this doc is useless when the software you’re planning to design is actually too unique and nothing similar has been developed yet. Ironically, uniqueness itself cannot guarantee the success of your startup.

There are situations when competition can cause less harm compared to the case when a priori unsuccessful software is being launched. The thing is that you expect your platform to attract a wide audience, but what if it doesn’t? A new application concept shall be carefully tested. A thorough analysis of the targeted demographics must be carried out, focus groups shall be interviewed, and many other activities have to be conducted.

All the actions mentioned above could not be performed in full secrecy. Meaning, the signing of the document shall better be postponed.

Preventing common mistakes

In some instances, drawing up an NDA cannot deliver the results entrepreneurs expect. As a rule, it happens due to the following reasons:

• Samples were applied. The templates shall not be used since they are too general and cannot accommodate all the requirements a business has. A personalized approach is a key in this process.
• Inadequate size of the doc. Making a too long/too short document could be a failure.
• Untimely. It makes no sense to sign an NDA before the idea is tested, or after certain facts were revealed to the public.
• Unclear legislation. In case you don’t bother to specify the legislation, you’ll probably face multiple issues, if it comes to that. The choice of legislation must be made before you sign your NDA.

Conclusion

Summing up, let’s enumerate the key points of dealing with NDA:

• clearly specify what implies by “confidential materials”;
• define what the disclosure refers to, and what responsibilities it imposes;
• verify the developers you employ to make sure they’re fine with introducing the secrecy order;
• consider existing laws while working on the punishment paragraph.