5 Reasons why we don't sign NDA before a meeting

by PixelForce     Posted on

As South Australia’s leading web and mobile app developers, we meet with a lot of clients. We’ve had moments where at the very first meeting, a client hands over their own NDA and asks for our signature before we even start talking.

The purpose of an NDA is to provide peace of mind to the client that a business or person has legal repercussions in the event if they take the client's idea and use it with malicious intent, not in the client’s interest. 

Having a signed NDA before sharing ideas might sound like a logical and reasonable idea, however, more often than not, we will actually refuse to sign for reasons that probably aren’t obvious.

 

1. You've come to us for our experience. Experience should not be restricted.

PixelForce has built many different kinds of technological projects. From eCommerce to business to two-way marketplaces to data processing applications. Signing an NDA restricts our experience from being used in future projects.

An NDA most likely includes clauses that, in a nutshell, establish ownership of the information provided by you AND new information and development strategies generated as part of an exchange between PixelForce and client.

We understand you want to protect your idea but what if a previous client already had an idea similar to yours? That previous client's NDA signed with good intentions, now restricts us from using our knowledge and experience to help you and your project.

New information and techniques generated is something we go through with all consultations as part of building successful businesses, which is a key reason why we don't restrict our own capacity to be service providers. Simply put, NDA restricts our future capacity to help others.

 

2. It creates unnecessary liability for us and unintended liability for our clients.

The legal obligations enforced by signing an NDA limit the extent of our consultation. If enforced, past clients who may or may not had an idea similar to yours could be in a position to take legal action against PixelForce (or even you), for the reason just because they spoke to us before you.

PixelForce wouldn’t be able to give advice to the best of our ability because we wouldn’t be able to leverage past project learning experiences into your project. Nobody wins when we tiptoe on our professional advice in the consultation stage. The risk we would put ourselves in isn't beneficial to any party.

 

3. It brings risk to PixelForce before we can even help you.

As a business, it is unwise to sign any NDA or contractual agreement without the consult of a legal team. A client bringing us their NDA sends the wrong message that implies PixelForce (or any other digital agency) needs to prove their integrity before we can even offer you advice and consult.

A misunderstood clause could have great ramifications for the entire company that we will outright refuse to sign any document without legal advice, even for “simple” NDAs. 

 

4. Your idea isn’t worth anything until it’s actually executed.

An idea is literally just that - an idea. Until you execute it, your idea is worth nothing more than the paper it’s written on. Lots of people have wonderful ideas in their minds but they never take action.

Often a new client wants an app that is very similar to existing apps or websites, whether or not the client (or us) knows about its existence. How many people have had the idea of Snapchat before it became mainstream? 

An idea only brings value once executed. It's one thing to be sitting on a million-dollar idea but until you execute it, it's worth nothing.

And if your idea is truly unique, you actually need a patent instead of an NDA.

 

5. You need a patent, not an NDA.

The second your product hits the market, no amount of secrecy during development would save it from the competition. Competitors will have the benefit of seeing how your product can be improved and made more profitable without any cost to them. They can almost immediately release a competing product based on your hard work.

These are the people you should protect against - not the service providers who need to know what your idea is to even help you.

In order to protect your business idea (if it’s truly unique and revolutionary), you really should submit a patent application. However, this can only be done after the code is written and you have a tangible product. That’s because your idea has no value as a purely intellectual idea - and we agree.

If the protection of your product is important, you need to protect it with a patent against competitors, instead of an NDA against the very service provider you’re seeking advice from.

 

Bonus. We have the Services Agreement to protect all parties interests.

As part of the development process, we have the Services Agreement, which include a section on confidentiality of privacy and your ownership rights to your intellectual property for when you officially commence a project with us.

This contract defines the difference between new and existing IP and ensures the relationship you embark with PixelForce is treated with care and professionalism.

As with all service provider relationships, the Services Agreement provides legal ramifications and identifies which type of scenarios a particular party is liable under.

 

In the IT space where ideas are plentiful, it’s good to be wary of protecting yourself. But an NDA can actually cause more damage than it intends to protect. If you’re interested in receiving advice and consultation, feel free to get in touch today. Just know that we’ll hold off on signing an NDA.

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