Signing an NDA

[boz]

I've done this twice now without really thinking through the consequences, but are there any real pitfalls you need to be aware of signing an NDA?

It seems you sign the NDA before you get the information so you don't really know if its going to be useful and what if you've already deduced some of the functionality?

What penalties can be applied, especially if your in another country?

Any tips?

[KJDS]

If you don't understand exactly what the NDA covers, then seek advice from a lawyer with appropriate professional Indemnity insurance.

More generally, in the UK, they only cover what is not in the public domain, and only for a time limited period. Penalties can be severe, going beyond the obvious and are enough to bankrupt most people, which is why most people that sign them do so on behalf of a Limited Liability company.

They should also state which jurisdiction applies, and it's quite common for major European companies to use English law, as it is more predictable than some other European companies. Having said that, if both companies are in the same country, they should be using the law of that land unless there is good reason not to.

[G0HZU]

It seems you sign the NDA before you get the information so you don't really know if its going to be useful and what if you've already deduced some of the functionality?

Where I work NDAs are commonplace. Usually it's for things like our evaluation of state of the art components or modules from manufacturers or for use of their advanced computer models of the components or details about their product roadmaps etc. Sometimes the NDA is to protect us if we submit something for quotation.

I don't get involved in the details of the paperwork but paperwork gets swapped several times in the process. I assume they expire and get renewed because we tend to deal with the same component/module manufacturers year on year.

I don't know much about the penalties but I'd expect that they could be quite severe if we did something silly like give away a computer model or a protected evaluation board etc. Also, it would probably mean the end of the trusted relationship with that manufacturer.

[Alexei.Polkhanov]

I think NDA is bad bad bad thing to start with so I would avoid getting under any kind of NDAs if possible.

At first I thought most of the time companies ask people to sign NDA o keep their designs protected against competition, but then it appears to be least of concerns for many companies - NDA is a just another vendor lock-in mechanism which is as bad and as it can be. Under NDA you cannot compare your product to others publicly, you cannot open source your design, you cannot document certain features in a way that it is hackable by others etc. etc. Often you can find leaked datasheets for ICs that otherwise can only be obtained under NDA and they know it and they don't seem to care - so if it is not about secrecy then what it is then

There is a German proverb that I like - "Everybody cooks with water". There is nothing they have that you cannot get elsewhere or figure out by yourself.

Usual alternatives:
- Try to find alternative components with publicly available data.
- If no good replacement exists you can reverse-engineer or just get the pin out by sniffing the board it is fair game as far as all sources obtained legally and especially if you are using it for interoperability.  http://www.yalelawjournal.org/article/the-law-and-economics-of-reverse-engineering

[G0HZU]

think NDA is bad bad bad thing to start with so I would avoid getting under any kind of NDAs if possible.

Not always...

If the company is a 'big customer' of a semiconductor manufacturer then they can get advance (preproduction)samples of their latest high performance, high cost ICs and transistors sometimes 1 or 2 years ahead of them being known about (or available) in the main market. This gives an edge to the company because they can plan and develop ahead and hit the ground running when the part is finally announced and released.

It benefits both parties   

[nctnico]

I've done this twice now without really thinking through the consequences, but are there any real pitfalls you need to be aware of signing an NDA?

It seems you sign the NDA before you get the information so you don't really know if its going to be useful and what if you've already deduced some of the functionality?

What penalties can be applied, especially if your in another country?

A few remarks about NDAs:
- An NDA without a penalty is worth the paper it is written on.

- If you receive anything physical (a prototype, materials, information on a CD, USB stick, etc) from someone or a company make sure they sign a form which states they got it back from you when you return it.

- If an NDA has a clause which prevents you from working on a similar project after finishing a project there should be a limit on the period. If that period is very long (say more than a year) you can tell (not ask!) the other party they have to pay you for the risk of not finding work.

- In some cases an NDA is mutual so it works both ways. For example between a supplier and a client. The supplier doesn't want their secrets disclosed and the client doesn't want information about their customers disclosed.

[Matje]

think NDA is bad bad bad thing to start with so I would avoid getting under any kind of NDAs if possible.

Not always...

If the company is a 'big customer' of a semiconductor manufacturer then they can get advance (preproduction)samples of their latest high performance, high cost ICs and transistors sometimes 1 or 2 years ahead of them being known about (or available) in the main market. This gives an edge to the company because they can plan and develop ahead and hit the ground running when the part is finally announced and released.

It benefits both parties   

That totally depends on the actual language used in the thing, and the jurisdiction you and the other party are in. Also remember: you may sign the NDA in good faith, the other side may well have other ideas about it...

Never sign a NDA that binds you for more than a reasonable time, say 3 years. Never, ever even think about signing one that has no time limit. Never sign a NDA that has no effective limit on claimed damages, IOW that can totally (financially speaking) destroy your life. Never sign anything that specifies some dubious jurisdiction and/or legal venue (i.e. no public courts but some rigged mediation thing or, say, Delaware or Texas or such crap as the only jurisdiction).

If there is the slightest doubt, ask a lawyer. If you are employed by a company so equipped, ask the legal department, grill them on the implications, get the stuff about the company helping you in case something goes wrong in writing. Then ask your lawyer about this document.

Usually nothing bad will happen, sign enough bad NDAs and one is eventually going to bite you and destroy your life. Anyway, NDAs are way overused, only idiots think they help keep a secret (or that they actually have a secret to start with), but then it is usually marketing folk and their ilk demanding them. ;-)

[MCPorche]

Never sign a NDA that binds you for more than a reasonable time, say 3 years. Never, ever even think about signing one that has no time limit.

Are you talking about an NDA?  Or a non-compete clause or something like that? 

An NDA says you can not disclose anything that your current employer does not want you to disclose.  I can't imagine them saying that after a certain amount of time you can disclose company secrets as you see fit.  Every single NDA I've ever seen says that it continues in perpetuity unless they release you from it in writing.

[miguelvp]

Say I invite someone to my workplace, they will have to sign an NDA because whatever they see in there might not be for public consumption yet.
There might be projects that are not even green lit or a lot of money spent in marketing and advertising and you don't want someone leaking the information wasting all those well timed announcements.

There are a lot of reasons for NDAs I don't think twice about them. Sometimes we are automatically NDAd by our company when we get access to other companies assets, specially when you work with multiple competing vendors, you can't tell them what the others are doing or what they are doing.

To me it's just common sense those things are in place.

[Jeroen3]

Basically all the nda prevents is that you get employed at a competitive firm after you leave. For example, from Apple iPhone team to Samsumg Galaxy team.
And to protect the proprietary information used or acquired while working.

I read above you cannot open source stuff when you have an NDA? Not true, if your company decides project X should be open sourced, what prevents you?

[miguelvp]

Basically all the nda prevents is that you get employed at a competitive firm after you leave. For example, from Apple iPhone team to Samsumg Galaxy team.
And to protect the proprietary information used or acquired while working.

I read above you cannot open source stuff when you have an NDA? Not true, if your company decides project X should be open sourced, what prevents you?

NDA is a non disclosure agreement. What you are describing is a Non Compete Agreement, different beast and non enforceable. No paper can prevent me to obtain gainful employment at a competing company, it's against the law, so the only thing the non compete agreements do is scare you off, but they have no value.

[mzzj]

Basically all the nda prevents is that you get employed at a competitive firm after you leave. For example, from Apple iPhone team to Samsumg Galaxy team.
And to protect the proprietary information used or acquired while working.

I read above you cannot open source stuff when you have an NDA? Not true, if your company decides project X should be open sourced, what prevents you?

NDA is a non disclosure agreement. What you are describing is a Non Compete Agreement, different beast and non enforceable. No paper can prevent me to obtain gainful employment at a competing company, it's against the law, so the only thing the non compete agreements do is scare you off, but they have no value.

maybe so in your jurisdiction but i wouldnt put my ass on the line based on that everywhere.
If i recall correctly state of California had one of strictest law about limiting your employment options  but some other us states have more possibilities, not to mention rest of the word.

[vk6zgo]

I've done this twice now without really thinking through the consequences, but are there any real pitfalls you need to be aware of signing an NDA?

It seems you sign the NDA before you get the information so you don't really know if its going to be useful and what if you've already deduced some of the functionality?

What penalties can be applied, especially if your in another country?

Any tips?

I think if the NZ legal system is similar to Australia,it is very jealous as to jurisdiction--------if what you signed is not a legal document under the laws of your country,a firm in another country may have a very slim chance of enforcing it.

Another thing is that some Companies try to claim as IP,stuff that is,& has been,Public Domain for many years.
Dumb?-----Yes,but it happens!

When in doubt,talk to a Lawyer!

[mikeselectricstuff]

I've done this twice now without really thinking through the consequences, but are there any real pitfalls you need to be aware of signing an NDA?

It seems you sign the NDA before you get the information so you don't really know if its going to be useful and what if you've already deduced some of the functionality?

What penalties can be applied, especially if your in another country?

A few remarks about NDAs:
- An NDA without a penalty is worth the paper it is written on.

And penalties are not enforceable in many jurisdictions - they would have to show that actual losses occurred as a result of disclosure.

[nctnico]

Basically all the nda prevents is that you get employed at a competitive firm after you leave. For example, from Apple iPhone team to Samsumg Galaxy team.

That is a non-compete contract which is usually part of an employment contract. An NDA is usually between companies but can include a non-compete as well.

[boz]

So penalties are somewhere between not worth the paper its written on and bankrupting your company,   

It specifically says

"Recipient shall only use the Confidential Information to evaluate and comment upon certain Confidential Information so as  to produce a reference design of a larger system that incorporates components from both Discloser and Recipient.  "

I cannot see how this can exclude open sourcing if you develop an independant design from the information so long as you dont use their software directly or reprint anything technical, the exceptions clause is

"Confidential Information shall not include information which: 
1)  is already known to Recipient at the time of  its receipt from Discloser as reasonably evidenced by its written
records; or 
2)  is or becomes publicly available without breach of this Agreement by Recipient; or 
3)  is made available to a third party by Discloser without restriction on disclosure; or 
4)  is rightfully received by Recipient from a third party without restriction and without breach of this Agreement;
or
5)  is  independently developed by Recipient without having any access  to Discloser's  information as reasonably
evidenced by its written records contemporaneous with such development. "

Its also time limited so fairly happy its not there to shaft me in any way..

Anyway their secrets are safe with me.

[boz]

.. Also noticed from another post in the forum that I started that somebody has already posted a VM of the development kit I've asked for online, so I'm pretty well covered under the exclusion clause 

[Conrad Hoffman]

NDAs are common here and almost any time anybody meets with anybody, an NDA is involved. My only complaint is that most companies think they have far more secret knowledge than they really do. There's nothing new under the sun. I like what Don Lancaster has to say about NDAs on his Guru's Lair site-

"Our secrecy policy: There ain't one. We do not normally do NDA's
or any classified work of any sort. Unless paid prearrangements are
specifically made, you can safely assume that anything and everything
you tell us can and will be dissemenated to the widest possible audience."

[Alexei.Polkhanov]

True. Very true.

I know some places where they ask people to sign NDA when they come for interviews. Then someone said that these are given to make people feel better, somewhat special, "trusted" and to boost their ego. Same purpose "round manhole" questions serve. It is same psychological trick that some famous investment thieves play (B. Madoff for example), governments do it with "clearances" etc.  "make them feel as member of an elite club...", "this product must be very advanced. I had to sign NDA to see it!". Apparently this is enough to give boner to some people. Not very smart, but hey! it works! 

[WarSim]

Clearances do not allow access to sensitive materials at all. 

Clearance is completely a standardized system which states the extent of vetting a person.  The vetting is specifically on the subject of past criminal records and evaluation of the extent of possible influence by known criminal elements. 

The information control system is completely separate.  Which I will not describe here because it is very lengthy. 

The confusion by people is likely caused when one of the control requirements restricts access to anyone with an existing clearance level.  The clearance level does not grant you access it only makes you eligible for access of you require the access and meet the other criteria. 

Because investigating people take a while, pre-vetting is performed if the person is expected to require sensitive information that requires vetting in the future.  If vetting for any meaningful clearance level for an ego boost, it is insanity.  Who in their right mind would spend that much money when a cake on their birthday every year for 35 years would cost a minuscule portion of the investigation costs? 



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[vvanders]

Basically all the nda prevents is that you get employed at a competitive firm after you leave. For example, from Apple iPhone team to Samsumg Galaxy team.
And to protect the proprietary information used or acquired while working.

I read above you cannot open source stuff when you have an NDA? Not true, if your company decides project X should be open sourced, what prevents you?

NDA is a non disclosure agreement. What you are describing is a Non Compete Agreement, different beast and non enforceable. No paper can prevent me to obtain gainful employment at a competing company, it's against the law, so the only thing the non compete agreements do is scare you off, but they have no value.

Not true, it varies based on the state you're in(at least in the US). They aren't enforceable in CA but can be in WA and some other states.

[miguelvp]

Depends on what the CNC states, it can't prevent an specialist on it's field not to work on his/her specialty.
If served and the new employer fires the employee causing lost wages, then the employee can sue both the new and old company and most likely win.

Unless you are part of some very secret trade information you'll be safe, and if you do have some very special trade secret information, you just have to inform your new employer that you can't bring that knowledge to your new job.

The thing is most of those secrets are usually common knowledge but their perception is that no one does it that way but they all do. Maybe some courts and judges will be willing to say that you can't earn a living or support your family and your employer can deny you raises and anything really because you are under non compete so they own you. Nope.

[Scrts]

Btw guys, I presume that you're signing  NDAs as a company. Have anyone ever succeeded having NDA signed with a company being a person?

[miguelvp]

Btw guys, I presume that you're signing  NDAs as a company. Have anyone ever succeeded having NDA signed with a company being a person?

We do it all the time (with people) and so far so good, vendors on the other hand