Protecting an intellectual property is a very important security measure, especially in such sphere of activities as the development of software. After all, in fact, an essential component of the application is not its code per se, but its idea as a whole.
The idea of a new original mobile application can be a starting point to success, but it can also lead to great disappointment.
It often happens that while one company is working on the implementation of the new product, their competitors produce similar merchandise at the same time, or even earlier, which undermines the first company’s efforts and the original idea’s novelty. In some cases, this may guide to failure.
The reason for this situation may be an inside information leak that occurred at the stage of development.
As is known, every major and well-known company, no matter what product it produces, has a "secret formula" - something that makes the company's commodities original and unique and the company itself successful. For companies involved in the development of applications, such "formula" is the basic app idea. That's why the idea, in the end, must be secured by the confidentiality agreement to protect an app idea, because the "innards" of the product - its business logic - is guaranteed to become known immediately after the release.
How to protect the idea?
To protect such forms of intellectual property, as the idea of a mobile application, a policy of non-disclosure, and its key element - NDA (Non-Disclosure Agreement), are used. In essence, the 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. That is, signing a non disclosure agreement for app development, signatories agree not to disclose any information related to the development to anyone, besides those who have signed this agreement.
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When used properly, the NDA is one of the most effective ways to protect the intellectual property, but sometimes the desire to protect secrecy can play a negative role in the progress of the business. In the following sections, we strive to consider the pros and cons of NDA, as well as explain when and in what circumstances its usage can be effective.
Benefits of NDA
First and foremost, non disclosure agreement template for app development guarantees a protection to your rights to the product under development, and all the intellectual property associated with both the product and its development process. App development NDA is a legal document, according to which, any dissemination of information about the project is qualified a crime: the disclosure of trade secrets. Thus, in case the competitors release a product, similar to the one under development, due to the leakage of inside information, you can legally prove the rights to this intellectual property. This, in turn, makes it disadvantageous for competitors to release the products based on your ideas.
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More often than not, large companies prefer to contract the third-party developers for the mobile development services. Signing the app development NDA with such contractors is a required step, not only to safeguard the confidentiality of the idea before the market release but also to eliminate the possibility of the unauthorized usage of intellectual property after the completion of the project. NDA also ensures that in the event of contract breach the hired company will not be able to continue the independent development of the product or use the ideas that form the basis of your project.
Why do you need an NDA for a mobile app? Signing of the NDA in the development of mobile application gives such opportunities:
- Keeping the project’s basic idea secret;
- Retaining the rights to the project and the idea of the application in the event of leaks;
- Retaining the rights to the application under development with the participation of third parties after the release;
- Retaining the rights to the product in case of third-party developers’ contract termination;
- Protecting the application as a whole and its components at the development stage and after the release.
When and with whom to sign a non-disclosure agreement?
Sponsors and investors. People who invest money in your application, of course, need to know all the details of the product under development, as well as receive regular information on the progress of the project. However, the same people may hurt the project’s future by unintentionally disseminating the information about the application or its basic ideas. The signing of the NDA with investors is a guarantee of the information about the application and its development preservation.
Own staff. When working on a new project, the signing of the NDA by all staff involved is a compulsory and most necessary precaution. In large companies, one of the conditions in non-disclosure agreement is not only non-disclosure to the outside, but also the non-proliferation of information about the project among employees who do not take part in the development.
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Hired developers. In cooperation with the outsourcing companies, the NDA signing is a very important step. A mandatory article in the non disclosure agreement for iPhone application development with hired companies should be the non-disclosure of the project information not only at the design stage but also after the product release. It should be noted also that most of the established outsourcing companies have a typical sample NDA for app development.
Testers and maintainers. When the application is being tested, as well as at the time of technical support agreement conclusion it is important to sign a non disclosure agreement with all the participants. Particular attention should be paid to the points of non-disclosure of the project’s technical details before its official release.
When may NDA harm the development?
Everything is poison and everything is a cure. Of course, the author's desire to keep secret both upcoming product’s features and the idea, in general, is quite logical and understandable. Nevertheless, excessive secrecy can significantly slow down the development of the project. Below we will try to give examples of situations in which the requirement to sign an NDA can harm the process.
Fundraising stage. It is important to maintain a balance: of course, disclosing the main idea of a new product to potential sponsors can be a risk, on the other hand, investing funds into something that will be explained only after signing the NDA seems very imprudent. The best way out would be to discuss the general direction of the project, its fields of usage and technologies that will be used in the development while holding back the main application’s features until the signing of the contract.
Developers hiring stage. At this stage, there are the same problems as in attracting investors: potential contractors must be informed about the task at hand and scope of work, without divulging the basic idea before the conclusion of the contract. While attracting third-party developers, it is best to talk about the prospectively applicable technologies, basic problems of the application and its parts development, without going into details until the moment when potential developers would agree to participate in the project. NDA should be signed along with a cooperation contract.
Thus, the proper use of NDA lies in its timely proposal. Not going too far with secrecy, while not giving up the whole idea before signing the NDA, would be the best way to safeguard the project during its development.
If you are not completely sure when and how to offer the signing of non-disclosure agreements, and what kinds of information should be kept secret - it is vital to consult the lawyers on how to protect an idea for an app.