With new innovations constantly broadening tech offerings, it is becoming harder for tech industry companies to stay ahead of the curve. Further, tech brands need to protect their own business product development and processes. You absolutely wouldn’t want the product you’ve been developing for a year to suddenly and unexpectedly be undercut by a near clone product from a competitor.
So, how do you do that? You may need to do more than seek patent protection for your startup’s intellectual property. Another topic tech entrepreneurs may need to consider is when having a nondisclosure agreement (NDA) might benefit their business interests.
Here are three situations where a nondisclosure agreement might be beneficial:
If your employees have access to confidential or proprietary information as part of their jobs
Having your employees sign a nondisclosure agreement can help protect your product development information in the case that employees leave the company before the product is released. An NDA also can help employees understand what they need to refrain from revealing outside of work. To ensure they understand what information should be protected, the team will need to review the NDA regularly.
If you are showing a potential business partner or licensee your product
Not every potential business deal works out. Thus, it is vital to protect information about your latest tech innovation or product features from reaching any competitor through a failed business deal. Nondisclosure agreements will protect you as you seek out potential business partners or licensees. Remember, potential partners can easily be approached by your competition at some point.
If you are using the services of another business that has access to your confidential product information or processes
When you are running a tech startup, you often need to utilize the services of others to continually build your business. If you realize that a vendor or contractor will have access to any of your confidential product information or processes, an NDA will make it clear what information they can’t reveal to anyone else.
Furthermore, nondisclosure agreements often come into play when entrepreneurs prepare to sell their businesses. You wouldn’t want a potential buyer who backs out, to pass on what product information he or she has discovered in the midst of the negotiations.