Coming up with your mobile app idea is a huge undertaking on its own. Identifying a market need, finding how you can meet the need, sizing up the market to ensure you have something viable, and then naming the thing… It’s a lot of work. So frequently the very first thing new clients ask us is “what do I do to protect my app idea?” They’ve already invested a lot of work into forming their idea, and they don’t want to lose their investment.
Fortunately, protecting your app idea is simple. A non-disclosure agreement (NDA) is enough to start a discussion. Once you select your vendor, add a few protections to their services agreement to ensure your app idea is covered.
Require an NDA
Before sharing the specifics of your app idea, ask any potential developers, vendors, or partners if they are willing to sign a non-disclosure agreement (NDA). Sometimes agencies will also refer to NDAs as confidentiality agreements.
An NDA should be very simple, typically just a few pages. At its core, a good NDA will document:
- Who is bound by the agreement
- What information is confidential
- Each party’s confidentiality obligation
- How long the information shall remain confidential
- Reasonable exclusions from the obligation
Who is bound by the agreement?
Typically, an NDA will bind two parties: the disclosing party (you, or your company) and the recipient (the person or company you’re sharing your app idea with). Generally, NDAs should bind both companies instead of specific individuals. Having the company sign your NDA is much easier than ensuring every single person that hears your app idea signs your NDA.
What parts of an app idea should be confidential?
The general idea of your application is probably not worth protecting, unless the idea itself gives you a competitive advantage. What you should protect is anything related to your business that is unique. Your NDA should cover all of the following aspects of your business and your app idea:
- Trade secrets
- Company finances
- Patentable ideas (designs, processes, and features)
- Business correspondence
- Documentation (including app specifications and requirements)
For example, the general concept of a social network is not really worth protecting. However, if you have a new way of discovering interesting stories within a social network, that is an idea—and a patentable one, at that—worth protecting.
What is each party’s confidentiality obligation under an NDA?
An NDA ensures that the recipient of confidential information takes reasonable measures to protect the information. That is, they should not share information on public forums, leave information in plain sight of the public, or leave protected information on unlocked phones or laptops in public places.
You can require more stringent and specific procedures for protected your app idea, but a general agreement to take reasonable measures to secure information will be adequate.
How long will an NDA protect my app idea?
Most NDAs have a term of a few years before releasing all parties from their obligations. A two-year term is common. Vendors may question a term of more than three or four years. Ideally, you’re executing on your app idea and the world will know about it long before your NDA expires anyway.
What should an NDA exclude from each party’s obligation to protect my app idea?
While an NDA party may do their best to protect your information, sometimes things get leaked through other means. The press may catch wind of your app idea. One of your own employees may breaches their confidentiality agreement. In either of those circumstances, it’s generally considered unreasonable for an NDA recipient to act as though the public information does not exist. Therefore, consider having a clause in your NDA that excludes publicly available information.
Do I have to write my own NDA?
Most vendors will have a standard NDA you can use. Ensure it covers each of the areas above—and little else!—and it should be fine.
Also, if an agreement is labelled “Mutual NDA” or “Reciprocal NDA” do not assume it’s really mutual. Sneaky agencies like to place those labels on an NDA while making the terms of the agreement completely one-sided.
How Should Services Agreements Protect My App Idea?
Once you agree to work with a vendor, you’ll want to sign a contract for a number of reasons. For the purpose of protecting your app idea, you’ll want to look for a few protections:
- Assignment of work
- Assignment of the agreement
Assignment of work performed by the vendor
First and foremost, you do not want to pay a vendor to develop their own intellectual property. Ensure that there is some assignment of any work performed to your business. A fair contract will indicate that all work performed by the vendor is “work for hire.” That is, the vendor assigns all work and copyrights to your company.
Assignment of the agreement itself
Second, you may want to prevent reassignment of your services agreement. If your vendor is acquired by a new company—say, a competitor of yours—you may not want them to automatically have a right to work on your product or to review your confidential information.
Do I have to write my own vendor agreement to protect my app idea?
Vendors typically offer a standard services agreement as a starting point. However, you are the customer and should feel comfortable redlining anything put in front of you: add things you need and remove terms that are not in your best interest.
Seek Legal Advice If You’re Unsure
We are not legal professionals by any means, so it’s always best to consult with your lawyer when you feel uncomfortable. While professional advice can be expensive, proper agreements will protect your incredibly valuable app idea.
Trust Twin Sun to Protect Your App Idea
When you work with us, you’re working with a team you can trust. We will treat your app idea as strictly confidential and help you deliver it to the world.