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Is an NDA worth the paper it's printed on?

Discussion in 'Intellectual Property & Trademarking' started by Mad Lab Rat, Mar 18, 2015.

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    Mad Lab Rat

    Mad Lab Rat Mad Lab Rat

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    What's an NDA? Definition by the book

    In its most basic form, a nondisclosure agreement is a legally enforceable contract that creates a confidential relationship between a person who holds some kind of trade secret and a person to whom the secret will be disclosed.

    You might be asked to sign an NDA in a wide range of settings, both professionally and personally. For example, information commonly protected by NDAs might include client and customer information, new product designs and schematics, trade secrets, sales and marketing plans, and new inventions. Regardless of whether you're being asked to sign an NDA or asking someone else to, a non disclosure agreement means your secrets will stay underground, and if information leaks, there can be serious legal repercussions.

    BUT

    Is this actually true? Do people really take notice of these confidentiality agreements? Do they work because the threat of legal action might scare people into keeping the secret, or would those people have kept quiet anyway because they are honest and it's the right thing to do?

    And the flip side, the people who don't keep quiet are *crooked* and the NDA doesn't prevent them from disclosing secrets anyway - you might just not know about it?
     
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    Paul Norman

    Paul Norman Businessman

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    The agreements may, indeed, not be worth the paper they are printed on.

    If, however, you are even remotely thinking of breaking an NDA, I strongly advise you to leave the business world forthwith and get a job involving a shovel and some horse poo. Because the trust between parties in sensitive situations is vital. And people really, seriously, do respect these agreements.

    I worked in acquisitions and disposals (of companies) for many years, and thus have signed many hundreds of these. I would studiously avoid being in breach of them, and most of my combatents did likewise.

    They work mostly, however, as you imply, because people are decent. And because in the remarkable small world of big business, you soon get known as someone not to be trusted.
     
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    Duncan

    Duncan Moderator Staff Member Premium Member

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    Completely agree with Paul. The most useful aspect of an NDA is to test early on whether you are dealing with a counterparty who applies common sense or a jobsworth/ingenue who can't sign a document without a lawyer covering their corporate 'ar5e'.

    If the latter you know you are in for a challenging deal!
     
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    Adam H

    Adam H Have a Break, Have a KitKat

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    I use them religiously for purchases and sales of web properties that are of value, like wise with larger companies outsourcing certain services to myself NDA's are always a good idea, an NDA you have to remember can cover alot of aspects or could be as simple as a couple of paragraphs of text. Obviously it involves a level of trust between said parties but if the values or effects of the NDA being breached is significant enough i wouldnt want to be on the receiving end of the consequences .
     
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    Geoff T

    Geoff T Graduate

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    IMHO - These days, they are like any other contract... they are only going to be valid as long as the parties have the will, the money and resources to enforce them... do your part, prove it - you have a case... otherwise they are a waste of trees...
     
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    Maevla

    Maevla Administrator Staff Member

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    We use NDA's as well, mostly to cover collections from 3rd parties, and covers intellectual property.
    However, they aren't war and peace, but we are wary of and likely wouldn't trade with somebody who refused to sign, even though we might not even necessarily know if it was breached or not.
     
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    thelegalstop

    thelegalstop Senior Lab Tech

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    You should obey the terms of your NDA (I mean both parties) and breaking it may expose you to court action. If someone is committed enough or if you have caused enough damage, you may need to pay considerable compensation, so it is really not worth it.
     
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    Maevla

    Maevla Administrator Staff Member

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    Absolutely agree!
     
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    BarneyBlue23

    BarneyBlue23 Trainee Lab Tech

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    How many people in small business would be able to afford to enforce one of these things? Not saying you should break one, but surely it would cost an arm and a leg now to try to enforce it, especially with the hike in court costs last week?
     
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    Maevla

    Maevla Administrator Staff Member

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    Well it's a good point made by Geoff and Barney, how many small businesses could afford to enforce the NDA? A whole lot I would imagine.
     
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    ISS

    ISS Son of Victor Meldrew Premium Member

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    True comments by all. One of the key indicators I find is when a company makes a fuss about having to complete one....
     
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    LawSpark

    LawSpark http://www.lawspark.org.uk/ Get UK Lawyer Quotes.

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    As the OP says NDA's can be hard to enforce if you do not find out about the breach! If someone does breach your NDA you then have to make a choice of whether it's worth going through the time and effort of taking legal action...

    On the flipside though, the alternatives to not getting an NDA are not great either. Depending on your circumstances failing to get one signed could well mean you have no legal protection (at all) if someone does rip off your idea. Sometimes the only option to grow your business (esp in the early stages) is to tell other people about it..So one way to look at an NDA is that it is better than nothing!

    NDA's are not always that expensive - some of the lawyers who use our lawyer quote website will put one together for you for a very competitive price. Or..you can even find templates from the internet for free these days.. Some protection is better than no protection!
     
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    Geoff T

    Geoff T Graduate

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    While I don't disagree with you Lawspark - the real kicker is when you come to try and enforce (and let's face it, a free internet download is about as useful as a chocolate fireguard)... the changes in the fees (and the attitude of judges) in the last 2 years will only have one effect (IMHO)... it will make it harder - and more expensive - for SME's to take legal action to protect themselves... for some, I can see that putting off, stalling (or even killing) business growth...

    I have an idea that would be a fairer option, but it's not fully-fledged - and besides I doubt they'd go for it...
     
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    epat

    epat Freshman

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    Just be wary with NDA's, people are generally decent, but due to my experience in the IT industry, well, lets just say I would not trust a certain well known accountancy software company with a NDA any more than I would trust them to follow any other law.
     

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