Learn From Proven Entrepreneurs

1) it’s still a contact –> is that a typo? should it be contract?

You're an idiot

I make sure the NDA has the following paragraph or something very much like it “If the information is transmitted orally, it must be followed up by a writing within 24 hours stating it contained confidential information and specific details what pieces of information are confidential. If the information is transmitted electronically or in a written format, specific confidential sections must be marked as confidential information. No other information is considered confidential information within the terms of this contract, including non-specific claims of confidentiality over entire documents/conversations/etc.”

I've *never* seen anyone send a writing after a phone call, or do more than blanket a document, MAYBE with confidential water marks slathered over the whole thing. (And I got this verbiage from a customer's NDA originally, but it's in the “Standard” NDA some clients ask for when they want to tell us their idea now).

Quite right. But keep in mind that sometimes an NDA is useful: You can use it to bash people who decide to break the honour code. If you really want to go after someone and he signed an NDA, then you can use that attack him.

I agree that most NDAs are mostly a mindless cargo cult. But one of the paradoxes of business is that you sometimes have to do business with people you don't trust completely. This is why people are offered NDAs when they first meet instead of, say, after they've been doing business for 10 years.

The key to a signable NDA for me is specificity (you have to state what you're protecting) and time limits (typically 6-24 months after the information is disclosed).

NDAs are different than noncompetes. Noncompetes are illegal in California anyway (although that doesn't prevent clueless amateurs from trying to get people to sign them) so it's a nonissue here.

All of your reasons are bunk.

Reason #1 is bunk because there exist such things as mutual NDAs. This “obligation” you speak of, that would be covered by a mutual NDA.

Reason #2 is bunk because you're someone with money, I'm someone with an idea and energy. You want to give me money so that I can do all the work and make you more money. That's usually the extent of our relationship, at least initially. You're not family, you're not a best friend, so why should I trust you?!?

Reason #3 is bunk because I would be more than happy to sign an NDA or Mutual NDA that you create. Now you know what's being signed, and I can breath easy.

Reason #4 is bunk because ideas aren't worthless, obviously, and if you're too prissy to sign an NDA I'll find someone who isn't, and in a few years time that great idea will be generating them money and not you.

Reason #5 – I'm not sure who you are btw and what you do, but if you're not investing money yourself then you're probably a liaison between me and good investors that you know and who trust you. If you and I can speak together openly with trust, then I can tell you everything and thereby give you a better idea of whether or not this idea is worth your time and recommendation. I'll be OK if none of the investors you know will sign an NDA, so long as you're reasonably sure they're trustworthy and will like the idea. And this way I can always tell you 'forget about it' without having to worry.

Reason #6 is bunk for the same reason #3 is bunk.

In summary: you can't pick and choose your genius. Well, you can, but that means you're narrowing your chances of success. If one of those crazy entrepreneurs insists they want a signed NDA, they probably have at least some reason for it, and sometimes it might be a good one. If you're not planning on stealing anyone's idea there's no good reason you can't sign his or her NDA.

Sure. Email it and I'll have a look.

Sent from my mobile

I enjoyed reading and agree there are many, many abuse.
The same with End User License Agreement… If you read it and all exceptions you can be surprised the software actually does something.

Not true. For a patent to be granted, the inventor must have “reduced to practice” the invention. That means that an idea can't be patented, only its execution.

Sorry lonny, but mrichman is right. patents are not granted on ideas – only on inventions, discoveries, processes, etc. Maybe the article is a little loose in what it defines as an “idea, or maybe you are. Either way, a pure idea can't be patented. “Reduction to practice” is a legal term, and its definition might clear up your confusion.