I've been asked to sign many NDA's before I discuss licensing my IP (the companies want to discuss their ideas in confidence with me, and how my IP would fit in their new products).  I've signed LOTS of them, but almost never ask others to sign them.

Here's my belief:  There are two types of people; those you can trust, and those you can't.  An NDA is pointless for the former, and worthless for the latter.

The only time I think there's a real value is when you're disclosing an un-patented idea, and want to keep alive the option of forign patent filing.

Here is a simple set of facts regarding use of Non-Disclosure Agreements:

1.      Able invents something.  Able thinks it is patentable.  Able does not want to, or thinks he can’t afford to, hire an attorney to prepare and file a patent application.  Able obtains an NDA.

2.      Able knows a guy named Baker.  Baker is a manufacturer.  Able gets Baker to sign the NDA.  Able discloses the invention to Baker to obtain prices for distribution and manufacturing.

3.      Baker discloses the invention to Carol – accidentally, intentionally, or whatever.  Carol does not know about Able or the NDA.

4.      Carol discloses the invention to Dan – accidentally, intentionally, or whatever.  Dan does not know about Able or Baker or the NDA.

5.      Dan discloses the invention to Ethan – accidentally, intentionally, or whatever.  Ethan does not know about Able or Baker or Carol or the NDA.

6.      Ethan begins to make, use, and sell the invention.  Ethan gets rich.

Questions:

1.      Who can sue Ethan?  What is their cause of action?

2.      What does your answer to question 1 tell you about Non-Disclosure Agreements?

3.      Who can Able (the inventor) sue?  What is his cause of action?

4.      What does your answer to question 2 tell you about Non-Disclosure Agreements?