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grumpyOldDude

Legal Does NDA really work?

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Apart from glancing over the first page, I haven't search much so I don't know (and apologies) if something similar has been asked recently,

 

Anyways ....

 

NDA is suppose to allow you to discuss confidential details of your ideas, products or business with outsiders with the knowledge that the signatories would be deterred from being sued if they 'copy' or 'use' what is being discussed.

 

But what if the signatories pass it (or sell it) on to 3rd parties who, though covertly linked to the signatories, has no links that can be proven in a court of law. And of course these 3rd parties would also claim their ideas, though similar, was developed independently. 

 

There may even be other ways of circumventing NDA, like modifying or tweaking the idea, with some core remaining the same, and passing on to 3rd parties. 

 

To me NDA doesn't seem to worth as much as people make it to be , what do you think? 

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Sure they work.

 

 

But "working" doesn't mean that they are ironclad and impossible to circumvent, or that are necessarily even legally enforceable. It's a little like copyright. My copyright does not physically prevent you from copying my works, it just provides me legal justification to go after you if you do. An NDA does not physical prevent the involved parties from talking or trying to covertly leak information (it happens often), but it provides a physical, signed artifact representative of the agreement not to talk that can be "good enough" to dissuade most people from going out and violating it, because it's probably not worth the resulting legal entanglements.

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Thats the whole point @[member='Josh Petrie'], because it can be circumvent so easily is the meaning of "not workable" to me. Any action can be equally costly to both sides depending who they are (that cancels out).

 

The only reason to be found guilty is to break blatantly without any creativity, conversely, the way to successfully break NDA confidentiality and get away with it, is to be creative and smart (yes still very wrong). But the need for the truth to be said in this matter is to warn those who naively think NDA is a safe haven, because I hear it mentioned everytime. No  its not 

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Sure, people who think that an NDA is some kind of ironclad impervious document should be educated. In my experience, nobody I have dealt with in actual business believes this. It's mainly folks on the internet who want me to sign their NDA before telling me about their "copywritten idea" for the next WoW-killer. Or whatever. NDAs are not toys, nor are they magical nuclear weapons. They require will, resources and effort to enforce if violated.

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It's pretty simple, if there's proof that leads to you not following up the NDA (for example sharing Information), you can be penalized for that.

In my experience on non-gamedev software Development/ business it works very well.

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To me NDA doesn't seem to worth as much as people make it to be , what do you think? 
 

 

Most NDA agreements actually work because the content creators don't want to upset the client and potential clients.

 

I don't know how it is with other artist, I think it's the same, for a 3D modeler reputation is every thing. If word gets around that a 3D artist doesn't stick to the NDA agreement they can expect to loose almost all their regular clients.

Un-trusting clients are also more willing to hire artist who have proven to stick to non-disclosure agreements.

 

However there is a large down side to NDA agreements for clients.

Content creators will often reject a project just because it has a NDA agreement attached, because most of the time it means that if the project fails, all the content created can't be used or shown to any one.

If the project failed because of a lack of funding it can happen that the creators don't get fully compensated for their time, they can't even sell what they made to earn back the money.

Having large gaps in a resume can also be bad, although most clients will provide proof that you worked for them in that time.

 

 

The thing to remember is to be very clear on what is expected from the NDA, broad NDAs will be rejected.

 

Most people will stick to the NDA, only a large sum of money could tempt them to break it and if there is money involved you can take them to court.

A NDA is as useful and as strong as any signed contract.

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Thats the whole point @[member='Josh Petrie'], because it can be circumvent so easily is the meaning of "not workable" to me. Any action can be equally costly to both sides depending who they are (that cancels out).
 
The only reason to be found guilty is to break blatantly without any creativity, conversely, the way to successfully break NDA confidentiality and get away with it, is to be creative and smart (yes still very wrong). But the need for the truth to be said in this matter is to warn those who naively think NDA is a safe haven, because I hear it mentioned everytime. No  its not


Some of that is always the situation. It's like warning that "it is only illegal if you get caught".

Some people will speed on the roads thinking that there are no consequences. Some people face the consequences of being stopped by police and facing a ticket of a few hundred dollars and an insurance premium rate hike, and sadly some other people face the consequences of crashing, facing expensive auto repairs, property damage costs, and risking injury and occasionally death.

While breaking an NDA won't mean death, if you are caught and the company chooses to fight against you it can destroy your career. As part of our hiring process we contact former employers. If we hear back you violated confidentiality agreements then you're not getting hired.

If word gets online that you broke your agreements then any future employee who types your name into the search box will discover it, and you'll struggle to find good jobs as long as it remains high in the search results.

It is true that many people violate their agreements. Few of them are caught doing it, and few of those are taken to court. The risk involved is rather low. But the costs involved are extremely high. There is the cost of tens of thousands of dollars in your own legal defense, possibly reaching well over the hundred thousand dollar range. Just having the accusations made can destroy their career and face lower wages once they do find work. Assuming it reaches a settlement rather than going all the way through the courts the person will have whatever those damages are, or if they fight all the way through and lose, whatever fines or penalties are assigned for breaking the NDA.


So no, an NDA does not stop people from talking, nor does it stop your secrets from spreading once someone releases them. Instead, an NDA makes most people think twice before talking or releasing company information, and if the person does do serious harm to the company, allows the company both to recover some money against the NDA breaker's future wages, and also to basically destroy the person's life if the company is vengeful after the damage is done.

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The only NDAs I've had to sign (or requested others sign) have been with business partners, which means there's already a certain level of trust and legitimacy in the relationship.

I wouldn't send my trade secrets along with an NDA along to any old yahoo on the internet... Of course that would end in a leak and an unenforceable legal situation.

Usually the professional thing to do is to assume that everything between you and your patterns is confidential, but an NDA let's each other know explicitly what it is that you really do want to keep secret (and that a leak of this would destroy the relationship at the least).

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They are good for a number of reasons. 1)  They do provide some protection against someone sharing your information.  Although as you said they physically could share your information, in our "everything is digital"  age it is nearly impossible to hide the fact that they have a connection to a third party.  2)  If anyone tries to steal a trade secret, one legitimate defense they have is that you were not protecting it enough so it was not a trade secret. NDA's are evidence that you are trying to protect your information. 3) It helps establish a level of confidence in a new business relationship. Its not perfect but many people are going to feel better having one then not, and when you feel better you work better, so your business relation is more likely to succeed.

 

That being said there is one situation where you actually do not want to force an NDA, when seeking investors. The reason being is that professional investors hear so many ideas that if they sign an NDA it could limit them from investing in an idea similar to yours but that was independently developed. This is only for the initial pitch and only for professional investors.

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