Hello again,
@nsmadsen: wow, my arguments surely got ripped apart ^^. But after all, that's exactly why I was so eager and at the same time so hesitant to post them (eager to hear other's opinions, hesitant to misinform others since I don't speak from experience).
I can see many of your points, other's I'd still disagree with and very few we've simply got our wires crossed, but we've both made our points, so I won't go on about that and instead simply say thank you for helping me understand the people that like ndas a little better.
bw,
Tobl
Non Disclosure Agreement
I think it's worth making the distinction between hobbyist and serious indie or professional projects when discussing non-disclosure agreements. It's also worth noting that just because a project requires signing an NDA doesn't necessarily mean that no information can or will be provided to potential candidates, and I think the presence or absence of some information -- along with the developers reputation or lack thereof -- can be revealing about the project.
Having the proper legal documentation and contracts in place is really important for any serious project, and is something I would expect of an professional indie developer, especially if they have an established reputation and are paying reasonable rates. There will normally still be at least some minimal information -- often one or more of the target platforms, perhaps a broad genre, maybe an idea of the theme -- provided, but the main details of the project may not be publicly available.
For hobbyists however, I find that an NDA is often simply a hindrance to the process, where a would-be developer begins recruiting with no information what-so-ever disclosed, one or more people proceed to request information and are told "you need to sign an NDA". For the professional developer who is actually going to pay contributors, and perhaps also has an established track record, this is fine, but when most people get this response from a hobbyist with no track record who isn't paying or is only offering royalties (which often amounts to not paying) they simply move on rather than spending the time to get more information.
An NDA isn't always appropriate, and you should judge the situation based on the information that is available. It's reasonable to be expected to sign a proper legal agreement for a proper, professionally handled project, but chances are it'll be a waste of time if you're dealing with a hobbyist who isn't paying and doesn't have a track record. As mentioned above, you should also be sure to read over the document carefully -- and even talk to your lawyer if you're not sure of anything -- before signing and make sure the terms are appropriate and agreeable; in the business world it's not a deal breaker to negotiate for different terms when those initially provided aren't agreeable, and you're doing yourself a huge disservice if you sign a legal document when you aren't happy with the terms.
The people behind Indie Fund also have a pretty strong opinion on the matter which they shared in a blog post: "The Worth(lessness) of NDAs", and reading over what they have to say and consider the situation I'd have to say the biggest take-away message is that an NDA does not suit all situations.
Having the proper legal documentation and contracts in place is really important for any serious project, and is something I would expect of an professional indie developer, especially if they have an established reputation and are paying reasonable rates. There will normally still be at least some minimal information -- often one or more of the target platforms, perhaps a broad genre, maybe an idea of the theme -- provided, but the main details of the project may not be publicly available.
For hobbyists however, I find that an NDA is often simply a hindrance to the process, where a would-be developer begins recruiting with no information what-so-ever disclosed, one or more people proceed to request information and are told "you need to sign an NDA". For the professional developer who is actually going to pay contributors, and perhaps also has an established track record, this is fine, but when most people get this response from a hobbyist with no track record who isn't paying or is only offering royalties (which often amounts to not paying) they simply move on rather than spending the time to get more information.
An NDA isn't always appropriate, and you should judge the situation based on the information that is available. It's reasonable to be expected to sign a proper legal agreement for a proper, professionally handled project, but chances are it'll be a waste of time if you're dealing with a hobbyist who isn't paying and doesn't have a track record. As mentioned above, you should also be sure to read over the document carefully -- and even talk to your lawyer if you're not sure of anything -- before signing and make sure the terms are appropriate and agreeable; in the business world it's not a deal breaker to negotiate for different terms when those initially provided aren't agreeable, and you're doing yourself a huge disservice if you sign a legal document when you aren't happy with the terms.
The people behind Indie Fund also have a pretty strong opinion on the matter which they shared in a blog post: "The Worth(lessness) of NDAs", and reading over what they have to say and consider the situation I'd have to say the biggest take-away message is that an NDA does not suit all situations.
Solid discussion all!
I definitely agree that NDAs are not always needed and when (and why) they're presented also matters. I also somewhat misspoke, NDAs are most certainly related to marketing to help give the company control over how and when details about it's project is released. But that's not the only reason for having an NDA and I agree with Brian's points 100%.
Good stuff you all!
Nate
I definitely agree that NDAs are not always needed and when (and why) they're presented also matters. I also somewhat misspoke, NDAs are most certainly related to marketing to help give the company control over how and when details about it's project is released. But that's not the only reason for having an NDA and I agree with Brian's points 100%.
Good stuff you all!
Nate
The following section from the indiefund site is the most appropriate point for indies:
"Enforcement – In order for an NDA to be worth anything more than the paper it’s printed on, a developer has to be willing to enforce it, and capable of enforcing it. That means retaining lawyers and investing significant amounts of money, time, and emotional energy. Even if a developer actually chooses to invest their time and energy in enforcing an NDA (at the expense of actually making games), they are unlikely to have the financial means to do so, or they wouldn’t be seeking funding in the first place. For deals worth millions of dollars, NDAs make sense because enforcing them in court could result in huge payouts. For deals worth $100k the risk/reward ratio means a legal battle is a terrible bet."
If you're asked to sign an NDA then ask for a mutual one. Just because someone gives you what looks like their "standard" NDA it doesn't mean it's their only one. It is most likely their most aggressive version trying to claw as many rights as possible. The same can be said for all type of contracts. If you aren't red lining half of the first contract that you get from someone like a MSFT or a Sony then you're getting hung out to dry.
"Enforcement – In order for an NDA to be worth anything more than the paper it’s printed on, a developer has to be willing to enforce it, and capable of enforcing it. That means retaining lawyers and investing significant amounts of money, time, and emotional energy. Even if a developer actually chooses to invest their time and energy in enforcing an NDA (at the expense of actually making games), they are unlikely to have the financial means to do so, or they wouldn’t be seeking funding in the first place. For deals worth millions of dollars, NDAs make sense because enforcing them in court could result in huge payouts. For deals worth $100k the risk/reward ratio means a legal battle is a terrible bet."
If you're asked to sign an NDA then ask for a mutual one. Just because someone gives you what looks like their "standard" NDA it doesn't mean it's their only one. It is most likely their most aggressive version trying to claw as many rights as possible. The same can be said for all type of contracts. If you aren't red lining half of the first contract that you get from someone like a MSFT or a Sony then you're getting hung out to dry.
Commonly two reasons for NDA, ethier they have a good product or their being paranoid. Anyway you stack it, everyone thinks they have a good until the media and game reviewers rip it apart.
Personally, I wouldn't have even sent it back to you.
I won't do business with someone who refuses to give me their address. Plain and simple. It's nothing personal. But I have an obligation as Executive Producer to ensure that the work of my team is not stolen. But you need to be informed as to the reason for this. I would try to explain the reason over the phone so that you could understand before I even sent you the NDA. It's obvious to me that he didn't do a good job at this. He mailed it a 2nd time before I would have mailed it the first. lol
Though we are creating games, which is fun, this is still a business. You have to be willing to do business if you plan to start working with any professional studio. The NDA is for your protection too. And yes, an address ensures that you ARE the person that matches the name. So, it is needed.
I won't do business with someone who refuses to give me their address. Plain and simple. It's nothing personal. But I have an obligation as Executive Producer to ensure that the work of my team is not stolen. But you need to be informed as to the reason for this. I would try to explain the reason over the phone so that you could understand before I even sent you the NDA. It's obvious to me that he didn't do a good job at this. He mailed it a 2nd time before I would have mailed it the first. lol
Though we are creating games, which is fun, this is still a business. You have to be willing to do business if you plan to start working with any professional studio. The NDA is for your protection too. And yes, an address ensures that you ARE the person that matches the name. So, it is needed.
Warning: I have zero understanding of this subject.
How does a bi-directional NDA typically protect ideas you yourself had prior to signing the NDA, that are now at risk from information the other party is divulging?
Example: I have a game idea involving x,y, and z. I sign a NDA for unrelated contracting work on Big Company's game. After signing the NDA, Big Company tells me their game involves x,y, and z. Now I can no longer use x,y, and z, despite coming up with the idea independent of their revelations, right? How does a bi-directional NDA typically protect both parties from independent and unforeseen conflicts in the information revealed?
Do NDAs typically have an 'expiration date'?
The only NDA-like thing I've ever received was the following (by email):
A couple add-on points.
Insist on a bi-directional NDA. That protects both of you (and it can keep the would-be employer from doing things like telling a competitor of yours how much you charge).
How does a bi-directional NDA typically protect ideas you yourself had prior to signing the NDA, that are now at risk from information the other party is divulging?
Example: I have a game idea involving x,y, and z. I sign a NDA for unrelated contracting work on Big Company's game. After signing the NDA, Big Company tells me their game involves x,y, and z. Now I can no longer use x,y, and z, despite coming up with the idea independent of their revelations, right? How does a bi-directional NDA typically protect both parties from independent and unforeseen conflicts in the information revealed?
The problem with a NDA is, that it is only a one-way contract. It protects the right of them, but it will hinder my future decisions. If I sign a NDA and got information about an idea I got myself, I will be hindered to use this idea in future projects. Signing many NDAs would be like killing off most of my creative decisions, even worse if I do not really know if any of the last X projects I worked on used this idea or not.
Therefore I would never sign a NDA for smaller projects or indie teams.
Do NDAs typically have an 'expiration date'?
The only NDA-like thing I've ever received was the following (by email):
I ___________ , acknowledge that the information I am agreeing to receive is "CONFIDENTIAL".
I ___________ , acknowlege that any information presented regarding the said topic, before or in
the future, is "NOT FOR DISSEMINATION", or to be used COMPETITIVELY.
I ___________ , understand the I am released from this agreement in 6 months ________, today's date.[/quote]
It wasn't very professional, since the person sent me the information in question (both in email files, and discussing it at length via the phone) prior to having me fill it out.
I filled it out via email and sent it back, figuring it couldn't harm me since it had an expiration date anyway, and I knew it was unrelated to my own business plans.
I modified it before sending it back. My modified version ran thusly:
I acknowledge that the <project>-related information I am agreeing to receive is confidential, and not for dissemination.
I acknowledge that any information presented regarding the topic of <project's general idea> and the monetizing of <project's general idea more specificly> is the property of <person I was discussing with>,
and I agree not to share the information without his permission, or use the information for competitive purposes.
I agree to not disclose the information contained within the package I am receiving, nor to make any use of it in any way without <person>'s permission.
I understand I am released from this agreement in 6 months from Thursday, March 13th, 2011, which is today's day.[/quote]
In what ways can someone signing NDAs protect themselves from unforeseen sideeffects to their own projects?
I wrote an article published in Edge Magazine several years ago, but the concepts and thinking about video game industry NDAs still applies. That article can be found at: http://www.edge-onli...res/curse-nda/. I'll also try to repost it on my site (http://dlr-law.com/writings--pubs.html) but no promises.
That said, you should always keep in mind that an NDA is a contract, nothing more and nothing less. If you're on the receiving end, you need to take care in considering each and every promise that you're making. While NDA lawsuits in our industry are not all that common, the potential for one is still there. So take care in what you sign.
Over the years, I've come across a lot of misconceptions about just what an NDA is and why is is of use. In previous articles I've written about the concepts behind copyright and the fact that an idea is not protectable under US copyright law. On the other hand, "trade secrets" can be protected, even when they are in the form of an idea, if, for example, it that idea gives a particular business some sort of advantage. In that case, the lawsuit would involve what is called interference with a prospective business advantage. Here the NDA would be of value.
Where a lot of businesses get off track is in thinking that their NDA will protect their cool game idea, but they fail to consider that they may not have the resources to effect a lawsuit necessary to enforce it. In practicality, one must consider not only the purpose of the NDA, and whether you have the resources to enforce or provide a defense against it.
Finally, keep in mind that NDAs come in all shapes and sizes. You don't necessarily have to settle for what is proposed and are free to make changes, as you would in any other contract negotiation. If you've every dealt with Hollywood studios, you'll know that their NDAs are often one way, take-it-or-leave-it agreements. In these situations, you need to decide 1) can I keep the promises they are asking; 2) if I can't what will happen; 3) do I have any room to negotiate. Rarely will you be sorry that you've at least tried to better the agreement in your favor.
-D
As always, the information contained in this post is not legal advice and you should not rely on it for that purpose. The sole intention of this post is commentary only.
That said, you should always keep in mind that an NDA is a contract, nothing more and nothing less. If you're on the receiving end, you need to take care in considering each and every promise that you're making. While NDA lawsuits in our industry are not all that common, the potential for one is still there. So take care in what you sign.
Over the years, I've come across a lot of misconceptions about just what an NDA is and why is is of use. In previous articles I've written about the concepts behind copyright and the fact that an idea is not protectable under US copyright law. On the other hand, "trade secrets" can be protected, even when they are in the form of an idea, if, for example, it that idea gives a particular business some sort of advantage. In that case, the lawsuit would involve what is called interference with a prospective business advantage. Here the NDA would be of value.
Where a lot of businesses get off track is in thinking that their NDA will protect their cool game idea, but they fail to consider that they may not have the resources to effect a lawsuit necessary to enforce it. In practicality, one must consider not only the purpose of the NDA, and whether you have the resources to enforce or provide a defense against it.
Finally, keep in mind that NDAs come in all shapes and sizes. You don't necessarily have to settle for what is proposed and are free to make changes, as you would in any other contract negotiation. If you've every dealt with Hollywood studios, you'll know that their NDAs are often one way, take-it-or-leave-it agreements. In these situations, you need to decide 1) can I keep the promises they are asking; 2) if I can't what will happen; 3) do I have any room to negotiate. Rarely will you be sorry that you've at least tried to better the agreement in your favor.
-D
As always, the information contained in this post is not legal advice and you should not rely on it for that purpose. The sole intention of this post is commentary only.
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