Game Project Management

Non-Disclosure Agreements: Do's and Don'ts

by Bill Fisher

DO…

…read and understand the agreement. Know what you need to do in order to comply, and what the other person must do. Pay special attention to restrictions on who can see information and where documents must be kept.
…clearly limit the scope of the disclosure to “evaluation” of the materials in preparation for future business discussions. Make sure there are no potential business obligations created by the NDA. Those should be part of a completely separate agreement.
…make sure you get an original copy with the other party’s signature.
…look for reasonable exclusions – if they tell you something that you already know, for example, you want to be sure you’re not locked out of using it just because they told you about it.
…look for a reasonable time limit. A few years is OK; five years is pushing it.
…watch out for the “Equitable Relief” language – it’s OK, but just recognize that it means the other person can more easily come after you if you make an improper disclosure.
…be sure you pay attention to the words “existence of this agreement.” If you’re not allowed to admit to the existence of the agreement, then don’t. Don’t tell your friends or other developers. It’s easy to let it slip and possible that it will cost you a deal.
…have realistic expectations. Just because they agreed to sign an NDA doesn’t mean you have the deal, though it’s a good first step. But they may already have had the same idea and might already be talking to several other people about something similar.

DON’T…

….believe anything that’s not in writing. There’s almost always an “entire agreement” clause in the NDA. Don’t listen to reassurances. If it’s not written down on the page in plain English, it’s not part of the deal. Period.
…show them anything specific until you have a signed agreement. It’s OK to discuss the generalities in order to make sure they’re interested (“it’s a one-on-one combat game with giant robots”), but you should be careful not to disclose details. The best way to do this is to treat the NDA as a “routine” item that you always do in any discussion. If they refuse to sign, then politely explain that your lawyer requires you to get a signature, then get up to leave.
…sign an agreement that includes an “assignment” of rights or any other language that gives rights to the other party beyond the right to evaluate what is being disclosed.
…agree to “trick” procedural language that says anything which isn’t marked “Confidential” is free for the taking. Make sure verbal discussions are covered, or that the issue simply isn’t mentioned (in which case the disclosure can reasonably be assumed to be covered).
…agree to language that specifically lets them use your ideas. This is often found in “Submission Agreements,” which typically disclaim all obligations to you. Run away from these.
…tell them any more than you have to. A little mystery goes a long way. Tell them just enough to show them you’re for real, and let them come back to you for more.