NDAs - Why Should We All Use It?

This is a bit of a side note to an article I published on Project Management and is in response to things I see a lot on Freelancer.

Non-Disclosure Agreements are one of those things people love to hate. I once saw a documentary on the super-rich heirs to American super families. One of them described how every time he ever looked at a girl, his family says "pre-nup".

Simply put -- NDA is a pre-nup for a project. I understand why Freelancers would be suspicious of them but I am more wary of those who don't use them. It tells me they aren't thinking broadly enough.

As an engineer with over 25 years of Automation and Control Systems work, I have had to sign many. It has become such common practice that I basically expect one with every new role and I have never seen or heard of one being acted upon.

What I see a lot of on Freelancer is people wanting to start the development of their idea and yet I see so few NDAs to sign off on. It's your idea -- show some self-respect and protect what you thought of. You are about to hand over that idea to someone whom you most likely don't know and have never met. There is a real chance you are about to pay someone to steal your idea.

Fundamentally, any unprotected Intellectual Property (IP) is worthless. In Australia, we have a television show called "Shark Tank" for pitching ideas to professional investors. It's the Australain version of an American show and at the moment IP is a current hot topic. There have been some great proposals squashed because the person putting forward their idea didn't own the rights to their own idea. It’s not a matter that some aren't in the process of getting a patent, trade mark or other IP protection. They simply admitted that someone else owns or has control of their idea or their knowledge. They get the same answer every time, if you don't own and control the IP, you have nothing for others to invest in.

I am certain that there are Freelancers with legal backgrounds and with better knowledge of IP and Patent Law who can better explain this. If you are one of them, please speak up.

If you are afraid of NDAs, read what it actually say and what it actually protect. Some are quite ruthless and effectively say that everything you do belongs to someone else. If you don't like what it says, don't sign it and walk away. Freelancer NDAs have a 12-month limit and are one of the most open minded agreements I have seen (and I don't work for Freelancer and they didn't ask me to write this).

Again, I am not a lawyer so get legal help if you are in doubt.

From my perspective, and why I like to see NDAs, it shows that the other party not only controls their IP but values it. It also tells me they have plans and that means they are more invested and less likely to walk away. At the bottom line it means I have a better chance of getting paid and more likely that I will have ongoing work.  

Inventors and creators who think like that are potentially open to offers of partnerships - where people like Freelancers can trade dollars for equity. At the early development stage, most inventors are strapped for resources. If they are thinking of an NDA, they value their ideas and are looking at potential investments - why not consider an intellectual investment? 

One of the common themes out of the Shark Tank can be paraphrased as do you want to own 100% of $1 or 1% $1,000,000 because one is 10,000 times better than the other. If you are the creator, giving up some equity to a Freelancer might be a better way to get your idea developed enough so serious investors get interested. But as the Shark Tank has proven, if you aren't protecting your IP from day 1 it really doesn't matter.

How many 2 parties agree on a partnership is up to them. I am not a contracts or IP lawyer - but I suspect there are Freelancers who are. With all the IP floating about Freelancer space with over 27,000,000 users, there must be someone.

Bottom line, I want to work with people and earn some money doing it. But in the end, it doesn't matter whether you are the owner, creator, contractor, worker or investor - if the IP gets stolen everybody loses. 

An NDA might not stop that, but without one, it basically says here is my idea please steal it.