|
In Silicon Valley, the "pitch" level of nda is basically worthless and not much better than not having one at all. For this reason, anyone pitching for investment money will not be (or at least should not be) relying on any form of nda to protect anything that is truly proprietary (i.e., distinctive to that company and giving it a significant competitive advantage) and confidential, at least until negotiations reach an advanced stage and a strong comfort level is established. That said, in almost every other context, confidentiality agreements are invaluable ways to protect competitive advantage and, indeed, if a company fails to use them, it may legally compromise the right to protect its trade secret information. That is why companies use these as a matter of course, both with employees and with contractors. Such agreements do not protect abstract ideas (which are basically in the public domain for the most part) and do not subject the recipient to risk if the recipient had pre-existing knowledge of any information from a separate source. Thus, the argument not to sign an nda really amounts to saying that the consultant doesn't want to be hassled with a small extra burden even while asking for the privilege of working with the company's most closely protected information. For 99% of the cases, this argument will go nowhere. The fact that some companies that have essentially worthless information use nda's, or that nda's are sometimes abused, does nothing to change the above fundamentals. Of course, if an nda is onerously worded, it should be negotiated (and rejected, if insisted upon) - but that does not dispense with the need of an nda that is bona fide for the needs of the situation. |