How effective is an NDA in protecting small enterprises?


Hi. Generally speaking, how effective are NDA agreements in protecting ‘David’ against ‘Goliath’ where a small enterprise is presenting an original product to a large company? Do well-known companies generally respect these types of agreements? Thanks in advance for your input.


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If properly drafted and supported by adequate consideration, an NDA generally enables the disclosing party to sue, under contract, the receiving party for equitable and other relief in the event the recipient discloses or otherwise improperly uses "confidential" or other information subject to contractual restrictions. To the extent a receiving party is willing to execute one, having it do so is usually a good idea. Of course, a "Goliath" receiving party will be less inclined to sign an NDA in the first place, for good reason: it is provided many solicitations and having many potentially-conflicting contractual obligations is unworkable.
An NDA is not a substitute for filing patent application, however, despite the former being arguably more protective. Filing a provisional application not only gets you a priority date for a subsequent, timely-filed non-provisional application through which you might acquire patent, but it can work to preempt a recipient’s own efforts to protect under patent that which you are disclosing. Provisional patent applications are cheap to file ($65 for a micro entity) and generally cheap(er) to prepare than non-provisional applications.
Prior to disclosing any information proprietary to your venture or its technology, it would be prudent to speak with an IP attorney to discuss your larger IP securitization and product development strategy.