Let's say you have a brilliant idea for a revolutionary idea or service - you want to attract potential investors and partners but still protect your lightbulb moment from being stolen away - no problem you think, I'll just get myself an NDA agreement.
Well, stop right there; NDAs serve a purpose, they protect confidential information and trade secrets but take a closer look at the situation - these are people you've never worked with before - isn't it a little too early to disclose your trade secrets? You don't want to demonstrate your technology and in doing so, disclose your secret sauce. If a demonstration gives it away then show them something else - perhaps the problem you are trying to solve.
Once you're more confident about your partners and ready to get serious, that's the time to consider an NDA. Here are the three most important things to keep in mind when considering/preparing an NDA agreement:
1. Never rely on a form NDA - they're trickier than you think. We've seen NDAs that prohibit the disclosure of your trade secret but don't limit the usage of the confidential information; so you think you're protected but really you're not.
2. Distinguish trade secrets from confidential information - they're not the same thing. Trade secrets are the most valuable confidential information of your business - usually restrictions on using confidential information have an expiration date but trade secrets, on the other hand, need to be kept secret forever. Trade secrets are usually those things that have an economic value to your company and that your company takes reasonable steps to protect - think of the formula to Coca Cola!
3. Lastly whenever possible avoid revealing your trade secrets because when they're out they're out. You can't put the toothpaste back in to the tube.
