Blog / Mobile App Development / Know How Mobile App Non-Disclosure Agreement (NDAs) Works

Know How Mobile App Non-Disclosure Agreement (NDAs) Works

Akhil Kumar By Akhil Kumar | November 23, 2019
non disclosure agreement for app idea

Have you ever faced a situation when someone stole your idea and you were not able to claim it? This is the main aspect when Non-Disclosure Agreements (NDAs) becomes a necessity for the business world.

Another scenario comes when you are just not confident in sharing an app idea with anyone that can be the next big thing in the market. The lack of confidence is usually due to the fear of someone stealing your idea. 

Hence, when it comes to sharing an app idea with another company or person, an NDA holds a lot of value. Whether the project goes a step forward or not, NDA is the first thing that one considers before sharing business or app idea.

However, if you don’t know what NDA is or if someone has suggested the non-disclosure agreement for the app idea to you then it is best to know what it is and how it is going to affect your idea. When you are sitting down for a serious business then you can’t walk on the path of trust and blindly share your idea with anyone.

Without wasting time, let’s get down to understand what NDA is and how it will affect your business idea.

What is the Non-Disclosure Agreement (NDA)?

NDA is a contractual agreement between the two parties that binds them together to protect confidential information and avoid any sort of complications in the future. Either party can’t disclose any information to the third-party while the agreement is valid. If any breach of contract is faced then there are clauses in NDA that showcases the punishment for the respective party.

Non-disclosure agreement for app development includes several terms through which it will be easy to describe the whole concept. This includes:

  • Confidentiality Agreement (CA)
  • Confidentiality Disclosure Agreement (CDA)
  • Proprietary Information Agreement (PIA)
  • Secrecy Agreement (SA)

The context of these terms are similar to NDA and are used as interchangeable terms with it. 

What are the Types of Non-Disclosure Agreement?

This includes three NDA types that are used as per the parties’ requirements. This will also give you an idea of the NDA template for app development.

1 – Unilateral NDA –

This is the most common form of NDA that is between two parties where one party cannot share the information with any other. It can be between the company and contractor, freelancer, or an employee to not disclose any algorithm to a third-party.

The signee will be legally bounded after signing the agreement to comply with the rules and clauses mentioned in the document. In case of any breach, the individual has to undergo prosecution by law. 

2 – Bilateral or Mutual NDA –

In this form of NDA type, both the parties are bound to sign NDA. After signing the NDA, neither party will have the authority to share the information with others about the project. This type of NDA is mainly used between the business owners that collaborate for project work.

3 – Multilateral NDA –

Similar to others, Multilateral NDA is for multiple or more than three parties that will be indulging with each other in confidential trade secrets.

NDA is a straightforward legal document that is used to serve the purpose of confidentiality in different forms.

What is Not Part of NDA?

The whole concept of NDA is to safeguard the idea from getting leaked. However, this is not the only thing that one must know about NDA. It protects data for the named party safe. For instance, if someone else approaches the signee with the same idea then they can claim that the confidential information is safe from their end.

This can be a challenging position since the recipient (app agency or developer) will have the authority to keep the data safe. They can showcase that the interest of both parties are conflicted or can stay away due to the knowledge they have on the idea.

How Non-Disclosure Agreements Can Protect Your App Idea?

Mobile app development is a serious business that can’t succeed if we won’t share it with others. Hence, it is essential to share ideas with others and take immediate action to perfect the idea without hiccups. Especially, when it comes to finalizing a mobile app development company then it is essential to consider NDA.

It binds the idea with a legal document before sharing it with another individual. This guarantees that your idea is safe, secure, protected and covered legally without any scope of idea theft. 

There are still instances of idea theft since people are not much aware of the whole concept of NDA for app idea that makes them unsafe on the legal end. There are many people that believe that NDA is completely unnecessary. However, no NDA can leave them vulnerable and unaware without anything to safeguard them from any sort of theft. By doing NDA, one can also save a lot of money, time, and effort as well.

Why Opt for NDA?

Traditionally, NDA was a way to protect secrets in the corporate world. The basic that was covered in the NDA document was to safeguard the code or formula of any idea from a third-party. If you want to know the answer to “Should You Sign An NDA For Your Mobile App Idea” then it is best to know the reasons for NDA.

Now, NDA is used for several aspects such as independent contractors, employees, and other business owners. In short, if anyone is sharing an idea with anyone then NDA is signed between the parties to ensure that no data is leaked.

The fact is that small, medium scale businesses, and enterprises understand that at one point employees will leave the job. In the present time, no one works in an organization for 14 years (like our parents or forefathers).

The employees or even contracts switch between companies in the same industry or different. Either way, it is essential to get an NDA signed to keep the proprietary information and trade secrets safe in the competitive market.

Otherwise, anyone can leak the information to the family, friends, media, or third-party. They won’t be bound by any legal document or clauses to withhold them from sharing the information.

If you want to get the insight on how mobile app development is affecting different industries, then here is the data as per the research on LinkedIn that showcases it effectively.

job turn over 5 years after graduation

Technology is affecting the industry in terms of mobile apps that are making industries hire mobile app development companies. This is the main reason NDA is added as the major logical aspect. Apart from this, psychologically has a different focus when it comes to NDA.

The companies use NDA as the mode to instill fear in the minds of parties since it gives authority to take legal action. This will make people fear that they could be potentially sued from leaking information or spilling secrets.

So, if you are saying “I have an idea for an app how do I protect it”, then you must go through the reasons to actually go for such a contract. The major reasons to go for NDA are:

  1. To protect the concrete proprietary information. This is for the data that are eligible for patent and copyright while representing the company.
  2. To averse the idea for a freelancer or contractor. However, it is essential to make sure that the information is not so restrictive or look like a burdensome form in case of dispute.
  3. For short term confidentiality. This is specifically for a specific period of time to ensure that contractors or agencies can easily sign it.
  4. To protect concrete proprietary information. This can be focused in terms of algorithms, codes, and marketing strategies.
  5. To keep a project a secret. This is to keep the information hidden from the third party or public eye. 

The information is a confidential agreement that is a start to move forward with individuals. NDA shows the seriousness of the situation and business in which parties are getting indulged in.

When to Sign NDA?

As mentioned above, NDA is a type of agreement that is used to protect the data or information from any data leak in the market. The tangible secret holds a lot of importance to leverage the competitive market. 

The established company, startup, brand, and organization focus on NDA to safeguard their idea in a market. It doesn’t include the unfair provision for either party and has reasonable aspects to execute the idea in a safe environment. As mentioned above, there are different non-disclosure agreements for the app idea template to get an idea of which type will be preferable. 

It is vital to understand that NDA must have a good approach for either party without putting them in tight loops. The parties come to a mutual understanding through calls or emails before sitting to sign an agreement to put a seal on the deal.

The need for NDA is to have a good fit for a project on both the party end. A handful of phone conversations and emails can easily check out the fit for the project. On top of that, there is no need to disclose confidential data during these high-level communication modes. 

In order to sign the NDA, it has to be done in a specific time frame such as:

  1. Beginning – It is essential to keep in mind that the agency or developers must get the NDA contract at the beginning. This will help in broaching the topic to increase the viability of any second party. However, it is best to start after a set of emails and phones to ensure that no one loses interest.
  2. Unfair Contract – The organization and company work on a fixed budget or pipeline. Hence, it is essential to keep extra cards and negotiating power mind that can make the whole contract go in your favor. 
  3. Protect Public Information – There are times when the idea or thought between two apps are similar. In such a case, public knowledge is not something that one can hide. Hence, one must work on the NDA eligibility to keep confidential information safe.
  4. Idea – There are instances when someone has a revolutionary idea that they believe in would change the way the app development world is working. In such a case, the NDA becomes essential while dealing with agencies and companies. The motive is to assign the limits while sharing the ideas with third-parties to warrant protection.
  5. Someone Rejected the proposal – It is possible to face conditions where ideal developers will say no to work on the project after you shared your idea with them. In such instances, it is best to get NDA signed to track record and trust the individual. 

There might be cases when someone pushes a lot to sign the NDA that is the sign of paranoid and criteria. This is not a good sign for either one of the parties. Before this, make sure to ask yourself “do I need an NDA for app development”.

When Not to Sign NDA?

The best thing is to remember that NDA is an approach that is famous among the parties on both sides. If you are not providing any sort of NDA contract then it is best to avoid any one-sided agreement. Both (all) the parties must be included in the NDA agreement as a mutual contract to protect disclosure and recipients’ confidential data.

One must be at a safer side while sharing the information about the project, process or even the data on proprietary. The term limit is essential while signing NDA between two parties that work indefinitely in an effective manner. Having a limited time frame for NDA is a good approach to move forward.

When it comes to mobile app development, then it is a different aspect of the confidential material. Along with this, the agency, company, and employee working on a similar product cannot share the information with each other.

This can actually increase the chances of conflicts of interest that can be extremely bad for the business. Hence, in such a case, it is essential to keep the liability in mind while managing the overexposure of the NDA contract. 

The major points that one must keep in mind while considering the NDA is that there can be instances when it is not needed. Here are the basic points to remember about not signing an NDA:

  1. Market Strategy of hiding the app or idea from the market. The pre-launch is a great way to get feedback and user base from potential audiences. However, with NDA the app idea will stay hidden till the date of launch which means no buzz for the app. The fact to ask is “does NDA protect from stealing ideas” that will give insight into the agreement.
  2. No Defence Strategy can be showcased while keeping an idea hidden. There is no doubt that copyrighting holds a lot of value for the company. In such a case, it is vital to know that NDA can protect the idea before it is launched but after the launch, the idea is free for others to steal or copy. It is vital to have a defense strategy in such a case apart from the NDA contract.
  3. No trust with NDA – NDA might be a great way to proceed forward in the business world but it doesn’t showcase the trust factor. Undoubtedly, the paramount of any relationship is trust and if it is missing out then it automatically loses its value. The parties ut their efforts and time in the project & sharing an idea or concept, in brief, is not going to hamper things.
  4. Not an original idea. There are instances when the idea is not original or originated some ideas already in the market. This alters the way we testify the development process and move ahead. The idea is to work on the existing app but you can’t have the copyright on it. This will protecify the fact of “how to protect my app idea”.

NDA can be difficult while executing. Getting signee onboard with an NDA is actually easy but what will happen in case of breach of contract is the bigger question. It is a harrowing and expensive process that one goes through to put the penalty on others. It is even possible that third-party heard the idea from someone else resulting in no action.

Bigger Picture

There are instances when NDA is vital for the companies that make them go for investors’ and developers’ contracts. If you are still stuck on the question “Should you use an NDA for mobile app development” then let us explain to you the essential point to remember.

  • If you are building an app for your business, then it is a unique one and no one is going to steal the idea. Since the business is already setup.
  • The developers are not going to build a similar app as yours since it won’t be beneficial for them. They are a development expert for a reason and not an entrepreneur for your niche(mostly).
  • No mobile app development company or agency can last long if they steal the idea of their clients.
  • When it comes to investors, it is best to refuse them to sign the NDA at the beginning of the project. However, as time proceeds and much sensitive information is shared, then it is essential to consider such aspects.

These are the major things that you must be aware of while signing the NDA with anyone. It is essential to know that this practice is good but not important at every point. Just keep in mind that if the NDA is not in your favor then it is best to avoid it at all costs.


Akhil Kumar
Akhil Kumar

Co-Founder & Managing Director of AppVenturez Mobitech. An entrepreneur who is tech-savvy and aims to build the largest software business through technological innovation, keen business strategist and a passionate technocrat. He firmly believes in learning and earning by planning and performing.

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