How to Use an NDA for App Development Outsourcing?
App development non-disclosure agreement is certainly the first thing you should think about while creating your first app. It will give you a sense of confidence and peace that your idea will remain safe while it’s being baked. NDA for app development will not only ensure the confidentiality of your idea but also will keep any potential conflicts at bay. Let’s understand more about it.
It’s a common story and it goes as follows: You have a new app idea. An idea that you believe could become the next big thing. But, the problem is, you’re too afraid to share your app idea with anyone.
To create a mobile app, you’ll need a team of expert developers who could thoroughly understand your app idea step-by-step and develop it. This is where you’ll need to contact a few mobile app development companies.
But, when hiring a mobile app development company, it can become fairly complicated for anyone to concern about the protection of their mobile app idea and other important information.
For anyone, the security of information related to mobile app development services becomes a prime concern. So, in order to keep the complete information of your app idea secret, making Non-Disclosure Agreements are preferred. And through this blog, we will share with you everything you need to know about NDA. Let’s get going.
What Does NDA Stand For?
NDA stands for “non-disclosure agreement”. It is a contractual agreement that states that both parties involved will work to protect the confidentiality of the information and no matter what the complications are, the data will not be disclosed to the third party.
According to some mobile app developers, the NDA seems to be ridiculous in some cases because sometimes the app idea is solely developed in clients’ imagination. They don’t have any business plan, design, investors or anything else about the mobile app. The idea is restricted to 2-3 sentences.
However, the NDAs are signed to protect the mobile app development idea. Though, they do not prevent others from stealing the idea. NDA only prevents the named parties in the document from disclosing confidential information to others.
This means, if one party approaches a mobile application development company or hire mobile app developers with the same app idea, the custom app development company can build the mobile app for other client provided they do not use any confidential information from the NDA document.
There is no rule for mobile app development companies that they cannot accept two similar ideas from different parties. However, the best mobile app development company always assures its customers to provide reliable services in order to build a good reputation and maintain a lasting relationship.
Why Do You Need to Keep Your App Idea Sheltered?
Generally, an organization’s demands for making the NDA with their hiring custom mobile app development company is because they need to share sensitive information about their company that might affect their business.
Moreover, if the app idea is related to the key process of the business such as manufacturing, research or finance-based, then they need to take precautions about the careful handling of their sensitive data.
Now, if any organization wants to introduce a new concept for creating a mobile app using unmatched features, they need assurance about the complete privacy of their app idea before its launch.
So, in order to protect their important information or prevent their app idea from being stolen, they demand their mobile app development company to sign an NDA.
Now, the main concern is to sign the agreement before understanding the concept. If you want to assign your project, and if you do not discuss your project details with your outsourcing partner, they cannot be able to make an agreement without knowing your brief. Furthermore, if your plans in the future are to get your app sponsored by other people, you also need to provide them with information about the app idea in order to attract sponsors.
This means you can prepare the NDA only after the initial discussion of the app idea with an app development company and other concerned people. In fact, it is also important to include all the employees associated with the app, sponsored people (If any), and the hired development team to ensure the privacy of the agreement.
How to Protect Your App Idea?
As mentioned above that to protect such forms of intellectual property, as the mobile app idea, a policy of disclosure and its key element – NDA are used.
Basically, the mobile app development NDA is a legal document that restricts the dissemination of information about the project or the developed products by the range of people that have signed the document.
By signing a non-disclosure agreement, the signatories (parties) agree not to disclose any information related to the development to anyone, besides those who have signed the document.
If you use the mobile app NDA properly, it is one of the most effective ways to protect your intellectual property. However, the desire to protect secrecy can play a negative role in the progress of the business.
Remember, the best cheap mobile app development company which has reached a point where you want them to perform services for you have something more important to protect. It is their reputation. This means they’re least likely to steal your app idea as they have spent years building their reputation.
How Does an NDA Protect Your Mobile App Idea?
Nowadays, one of the most valuable properties owned by a company is Intellectual Property. Companies take all required steps to protect their intellectual property rights and also to make use of these properties efficiently.
One of the ways to protect these properties is by entering into a “Non-Disclosure Agreement”. As you know that this document lets a company share its intellectual property with those whose input is needed without putting it to risk. If a company has a product idea that needs to be protected, the NDA makes sure that the recipient party does not disclose that idea or information to a competitor or any outside person.
Going back through many of our client relationships, especially the best ones, almost none of them requested we put an NDA in place. But, even though they didn’t ask, we always put an NDA before the starting of a project. Our agreements provide protection for the intellectual property and confidential information of our clients.
In fact, to facilitate and streamline the mobile app development process, we do our best to provide forms and legal documents so that there is no issue arise later. In addition, you’re also welcome to use your own NDA when entering into an agreement with us. However, our legal department will need to review it first.
When You Should Sign an NDA?
When there is a mutual understanding on both sides regarding the mobile app development, or if you’re working with an established company, it becomes a subject of less concern to sign an NDA. Here, the only thing you need to ensure is that all terms have no unfair provisions.
NDA While Entering Into a Business Deal
While entering into a business deal such as hiring freelance app developers, or mobile app development agency, if you want to ensure that the app idea you’re sharing with those service providers does not become public, then entering into an NDA is a good idea.
For instance, if you are going to work with an iPhone app development company, and have to tell them the concept of your app idea, and don’t want them to discuss it with your competitors, then entering into an NDA will be very useful.
Sign NDA While Talking to Investors
Many people used to do this in the past. However, it is unnecessary and has become outdated now.
Most investors will refuse to sign an NDA for early discussions. Only if the need arises to know the inside information, such as revenue numbers or a particular technology, a request to sign an NDA should first be made.
Important Clauses of NDA
- The timeframe of an NDA: It is the period for which NDAs are made to be maintained. In simple words, it is the duration of time for which the recipient of the information is expected to hold the secrecy of that information. This duration includes the day when NDA comes into effect till the time it expires due to the completion of the contract. However, it is not a good idea to create NDA that prevents one from holding information infinitely. There should be a reasonable limit to restrictions in NDA.
- What Secret Information Ought To Be Protected Under The NDA: This part of an NDA specifies which information has to be kept confidential or secret. Generally, such confidential information is detailed in a schedule and attached to notices sent by email.
- Duties and Obligation of The Parties to NDA: The NDA contract must clearly state the responsibilities and obligations of the parties. For instance, the app development company may be required to use a particular kind of mechanism for communication or maybe use a particular technology to build a mobile app.
- Consequences of Breach of an NDA: What would the consequence of the recipient party breach the confidentiality? This is an essential part of an NDA and this must be specified in the contract. Generally, heavy financial penalties are one of the consequences added to most NDAs. But, getting an indemnity for all losses suffered due to a breach is usually sufficient.
- Right to Seek Injunction in an NDA: It is specified in almost all contracts that monetary compensation alone cannot compensate losses arising out of the breach and that the parties are agreeing to this in the contract itself. This must be done so that a party apprehending a breach can reach out to the court and get a stay easily.
- Return of The Information in an NDA: Generally, at the end of the agreement, the confidential information needs to be returned or destroyed by the recipient party.
Your non-disclosure agreement must contain a clause stipulating how and when exactly this should occur. Now, due to the advent of email storage, drop boxes, etc. it’s impossible at times to completely destroy every bit of information that’s shared. But, including this type of clause in NDA can inform the recipient party that all received information must be returned or destroyed. And, if the information is difficult to destroy, the clause can include legal terms to prevent the recipient party from sharing the information with the public in the future.