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The truth about NDAs
by
DavidMarshall
When I was studying law, Lennon/McCartney asked the right question. “Listen, do you want to know a secret, Do you promise not to tell. . .” Life was so simple back then!
In the 1960s, I never saw a nondisclosure agreement (NDA) from one month’s end to the next. Now you can paper the office walls with them. Everyone wants everyone else to sign an NDA whenever confidential or proprietary information is to be shared. This national paranoia is a response to the general lack of ethics in business. But all you inventive and creative people need to keep it real. Just as the hopefuls who enter American Idol learn they can’t sing, it’s almost impossible to be genuinely innovative. The common domain is full of ideas just like yours!
Should you use an NDA?
Whether you’re an employer or a creative/innovative person, an NDA is a completely worthless piece of paper unless you’re prepared to enforce it. Have you patent protection, or copyrights for the relevant designs and descriptions of your ideas? The best protection comes by using the Intellectual Property (IP) system. More importantly, can you afford to file a trade secret complaint and maybe fight cases in multiple jurisdictions?
For contract purposes, if people from different states are involved, you need choice of law and venue clauses so the parties know which state’s law will be applied and where the case will be litigated. If your contract is silent, resolving disputes over jurisdiction and which law to apply is challenging. You should also define exactly what information is considered commercially sensitive. Vague and general contracts are more difficult to enforce.
If this is an IP dispute with plaintiff and defendant(s) citizens of different states, the Federal not the State Courts have subject matter jurisdiction, but do your expert witnesses prove losses exceeding the statutory minimum $75,000 for diversity jurisdiction? Then remember there could be multiple defendants. First there are the parties signing the NDA. But what about the others who persuaded those parties to break the NDA, and how many companies now hold your commercial information and/or exploit it, where are they incorporated and in which states do they trade?
NDAs sound great, but businesses often find similar ideas to yours in the common domain knowing you’re unlikely to sue. It’s a sad fact of life. Get used to it!
Author Bio
DavidMarshall
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I'm now retired from full-time work although I keep my hand in with all things legal, particularly in the area of conflict of laws/private international laws where resolving problems between different legal systems remains one of the most stimulating challenges available to a lawyer. People with interesting legal problems can always try to tempt me back into the real world. I plan to stay young by exercising my brain.
See DavidMarshall's
Read More.
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