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 essentially 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 that’s not in the client’s interest.
Having a signed NDA before sharing ideas might sound like a logical and safe idea, however, more often than not, we will actually refuse to sign for a few reasons that probably aren’t obvious.
The following five reasons explain why we don’t sign NDA with our clients.
1. 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, PixelForce wouldn’t be able to give advice to the best of our ability because we wouldn’t be able to leverage past projects and learning experiences into your project.
If one of our other clients had an app idea that’s similar to yours, they could be in a position to take legal action against PixelForce (or even you) just because they spoke to us before you. We gain nothing by limiting ourselves and we risk a great deal to not just us but all future clients.
2. 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.
3. You need a patent, not an NDA.
The second your product hits the market, no amount of secrecy during development would save it from competition. Competitors can almost immediately release a competing product that may be substantially better and more refined than yours, and they’ll have the benefit of seeing how your initial version can be improved and made more profitable without any cost to them.
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.
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. The idea would only bring value once executed and it’s possible that a number of other people around the world have the exact same idea - the real value comes from acting upon that idea and making it a reality.
5. We’ll be less willing to give out professional advice.
Clients who ask us to sign an NDA make it apparent that they don’t want or trust external parties to know about their idea, which is the antithesis of collaboration. Part of the process to perfect your idea is to discuss with others.
As part of our consultation process, we find solutions to unforeseen loopholes in your idea. The best advice comes from people who voice their opinions and actually challenge your idea. As long as they justify why, this type of advice is miles more valuable than the people that just nod and say yes.
An NDA restricts everyone’s ability to offer advice because the advice we would give you might have already been given to someone else prior. You’re likely not the first person we’ve spoke to with an idea like yours. So an NDA doesn’t help facilitate discussions to better the product.
Of course we believe in confidentiality and the protection of intellectual property, and just because we won’t sign an NDA doesn’t mean we’re going to take the liberty to talk about your project specifics with everyone. As part of our Services Agreement, we include a section on confidentiality of information and your ownership rights to your intellectual property for when you officially commence a project with us.
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.