Could someone please explain a NDA to me

pipelaser

Hi All,
I’ve recently thought of creating an iphone application.
I have what I think is a really good idea and have a few quid put away to invest in the development of the application.

The problem is that I don’t have the expertise to develop the idea myself, its not in my field at all. So I have to outsource and commission a company to build it for me.

I’ve found the company that I think can bring it forward and are capable of creating a good end product. They’ve designed a few great ones in the past.

I’ve been in touch, and they what to hear about the idea I have so they can give me a rough quote. (Contact has been made solely through their website)

They said that they would send me out an NDA (Non disclosure agreement), I’ve received it and it’s a standard thing they send out to whoever, with the project manager’s digital signature on it. I looks convincing and has all sorts of legal jargon (that I struggle with) saying that they will not disclose the idea to anyone. (But nowhere does it say that they cant use the idea themselves).
The blanks that have to be filled in are, my company’s name and the current date and that’s pretty much it.

Two questions.

1. Because I haven’t patented the idea (and there would be no point because of competition laws), could they steel the idea and create the application for themselves even with the NDA in my possession?
2. Is an NDA not worth the paper its written on if I don’t have a my solicitor signing as well?


Sorry if it’s a bit hazy but please try to do your best!
Any further questions welcome.

Thanks in advance guys!

Pines

1. Because I haven’t patented the idea (and there would be no point because of competition laws), could they steel the idea and create the application for themselves even with the NDA in my possession?

Unfortunately, it's not enough to just say the NDA is legal jargon and shrug your shoulders. Nobody can advise on what "an NDA" allows or prohibits one of the parties from doing. There are one-sided NDAs which favour the person with the idea, one-sided NDAs which favour the person receiving the idea, balanced NDAs which treat both parties identically, and simply badly drafted ones that don't make an awful lot of sense. Without reading the NDA, who knows what this one says.

Having said all that, most standard and well-drafted NDAs which do not excessively favour one or other party would not allow the receiving party to release a product based on the information disclosed. The terms would prevent any disclosure of the idea, and releasing a finished product which has the idea built in would be prohibited by the NDA as this would constitute a disclosure.

2. Is an NDA not worth the paper its written on if I don’t have a my solicitor signing as well?

Your solicitor does not need to sign and normally the solicitor would not sign - he or she is not a party to the agreement and is neither giving nor receiving information. It's a document for you to sign, if you're comfortable with the restrictions it imposes on you and on the company you're dealing with.

FWIW in most cases, your biggest concern is probably the reputation of the company. Are they reputable, established guys who are known to produce good work? Do they have a history of developing apps for others? A good track record in this regard is probably more important than the precise terms of an NDA.

Also, FWIW, even if it's not patentable there will be copyright in the finished app. The ownership of that copyright will determine who has the right to distribute the software. Make sure you and the company are fully agreed, in writing, who owns the copyright. It's not uncommon for you both to have a different understanding in this regard, and the mere payment of money by you does not guarantee that you will have good legal title to copyright in the work you commissioned.

Good luck