Whether you’re a software developer or a business owner looking to retain one, chances are a software development NDA becomes an issue at some point. The question is, should a nondisclosure agreement be signed by a prospective software developer before taking on a project?
From a marketing standpoint, an NDA or confidentiality agreement is a good thing to win a prospective client’s trust. By balking at signing one, distrust is created, particularly when the prospect is afraid someone is going to steal their idea and run with it before they can.
From a legal standpoint, however, there are some pitfalls that should be addressed before signing such an agreement.
For example, some NDAs are drafted so broadly that the developer is giving away pre-existing intellectual property (IP) or even future IP that will be created down the road for other clients. In fact, it may even contain a non-compete provision that prevents the developer from doing work for others even if this project isn’t awarded to the developer.
So, it’s important for both parties not to use a boilerplate NDA that covers too much or too little. Rather, it should be tailored to specifically address the prospective client’s concerns with respect to how the developer treats the actual intellectual property being revealed before the developer is formally retained for the software application development project.
Of course, there’s also the issue of supply and demand. For instance, if there are 1,000 developers available who could easily do the work and the business is willing to pay competitively, then the business may have greater bargaining power on the scope of the NDA.
On the other hand, if there are just a handful of developers with the skillset and experience needed to create a complex application, the developer holds the negotiation reins and may even reject signing an NDA knowing the prospective client doesn’t have the flexibility to look elsewhere.
Do you need a software development NDA prepared or professionally reviewed before signing? Then you ought to schedule a phone consultation with Software Lawyer Mike Young.