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NDA Needed?

I develop and support a free software add-on for a commercial application.  The software has been very successful within the application's user community.

I have begun making a more comprehensive and commercial viable version.  I have been in touch with application's developing company and they stated that they didn't have plans to add the features that I was developing for well over a year and that they'd be very interested in a cooperative marketing and revenue sharing agreement.

I promised that I would send a prototype.  I plan to protect the executable with a software protection system (Armidillo), but should I take it a step further.

Should I request a non-disclosure agreement?  If they had possible plans for the features I am implementing, don't I run the risk of demo'ing my product and then having them implement those features within a year?

hmmm...
Tuesday, July 06, 2004

Who are you afraid they'd disclose it to?

Ron
Tuesday, July 06, 2004

Maybe I'm showing my own stupidity, but won't the NDA prevent them from taking my ideas and directly implementing them into their own software?

hmmm...
Tuesday, July 06, 2004

I don't think it would prevent them from doing that necessarily. Also you should be prepared for them to lose interest once you show them the prototype.

There's not much you can do to stop them from copying you if they want to unless you get some software patents.

So it basically comes down to you'll have to trust them and if they violate that trust and they might you're up the creek but 'that's business'.

Phillip Watkins
Tuesday, July 06, 2004

I meant to say 'lose interest once you ask them to sign the NDA' - most big companies have policies against signing those of others, particularly from small companies and individuals. Not to say that they won't make you sign one though if they feel like it!

Phillip Watkins
Tuesday, July 06, 2004

Didn't you say before that you told them about features and they are going to implement them in a year? What are you going to do in a year?

If they are going to use your software instead of rolling their own themselves, then you need to negotiate how much you will get.

If they integrate these things into their own in a year, then you are out of luck and no matter what kind of legal agreements they'll sign, and if they are a big and smart company, they won't ever sign them, you will not win if they have more money than you.

Poof
Tuesday, July 06, 2004

"won't the NDA prevent them from taking my ideas and directly implementing them into their own software?"

Nope, a non-disclosure agreement will only prevent them from disclosing your idea to other companies.

Nothing will protect your "ideas," which are a dime a dozen, though copyright will protect your implementation (i.e. they can steal your ideas, but not your code).

Ron
Tuesday, July 06, 2004

>Also you should be prepared for
>them to lose interest once you
>show them the prototype.

Why will they lose interest?

hmmm...
Tuesday, July 06, 2004

I meant to say 'lose interest once you ask them to sign the NDA' - most big companies have policies against signing those of others.

Phillip Watkins
Tuesday, July 06, 2004

Ahh, I see.  So, it doesn't look like much choice.  I'll present the application and hope that they don't shaft me.

hmmm...
Tuesday, July 06, 2004

remember that the second they saw the free version they had a good idea what you were doing, and prolly how you were doing it.....or at least how they could do it themselves...

very few software problems are actually hard to solve in themselves, what makes specific implementations valuable is the way they are done, the interface for them, the fact they are already written...etc etc.

and, on the whole, in my experience the vast majority of people are surprisingly  honest :)

FullNameRequired
Tuesday, July 06, 2004

The trick is to develop something that, in its simplest implementation, is so heinously complex that no company is going to attempt to copy it.  Then, you create a 30-line emulator for that in JAVA and GPL it.  Voila, no one can "steal" your idea and legally profit from it.

sir_flexalot
Tuesday, July 06, 2004

I think it is hard to protect yourself in this case, unless the business situation is such that there is inherently no conflict.

Who are you dealing with at the company? Does this person  have the authority to work out a cooperative agreement with you? Does this person have the authority to implement it, that is, to see that the product is sold?

What is the motivation of the company to work with you, beyond getting some programming done more quickly? If they want to do the programming themselves, you are effectively competing with their engineering. Regardless of any agreement you might have with the company, engineering might make it a priority to get rid of you. Otherwise, if you are successful, management might decide to outsource more development.

Does the company have inherent reasons for either wanting to implement the feature, or for not wanting to? In my experience, companies frequently want nothing to do with interfaces between software products, since nobody at company A wants to track every version of the products of companies B, C, and D. On the other hand, if you have what is clearly a missing core feature of the product, it is hard for them not to want to do it themselves.

Beware of a company that is simply marketing your product as a stopgap. I'm familiar with a large company that was famous for this. They had a third-party add-on program, listing lots of products. Customers who tried to buy a system, including the add-ons, would be told by the salespeople "buy, the system, but wait to buy the add-ons, since we'll have our own version soon". The company effectively used the add-on catalog to determine what features were of interest to their customers, and to get free sales help with the features.

Dan Brown
Tuesday, July 06, 2004

I'm dealing with the president of the company.  He's well aware of the freeware product that I have been supporting.

Relative to the competing field, their application is fairly old (features wise).  BUT, the code is solid as a rock (unlike competitors), so they have a fairly loyal following still (apparently around 4,000 users at $80/mo for the software rental).

They are looking to catch up features wise.  My product would provide a quicker to market timeframe.  Secondly, I don't believe that anyone at their company is an expert in the functionality my software provides, so they would have to acquire a bit of knowledge before they could even begin their own development.

Since I can't really protect my ideas, my only resort is to make sure I get the best deal possible, correct?  Can I try and solidify a deal before even showing a prototype? That sounds rather tacky.

hmmm...
Tuesday, July 06, 2004

> Since I can't really protect my ideas, my only resort is to make sure I get the best deal possible, correct?

I think so.

> Can I try and solidify a deal before even showing a prototype?

You should have an understanding that you are showing it for the purpose of making a deal with the company.

Honestly, the existence of a third-party add-on market adds credibility and respectability to their program as well as free marketing so it would be foolish of them to try and squash you microsoft-style. But they could, you never know what people are thinking. Hopefully he's thinking that this could be a good deal for boh of you. That's called doing business the old fashioned way and is very different from modern business techniques of destroy your enemies and then destroy your friends that have come out of certain asian warfare philosophiesa nd the writings of machievelli.

anon
Tuesday, July 06, 2004

Thanks for all of the advice everyone!

hmmm...
Wednesday, July 07, 2004

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