Don’t Sign That NDA So Fast!

I’m not a lawyer (and I don’t play one on TV) but dealing with Non Disclosure Agreements (NDA) has been an important part of safely conducting business in the Promotion Products Media industry. Most are client required and some are distributor generated. Understanding how NDAs can interfere with your current and future marketing activities is obviously quite important.

Almost without exception a NDA your client asks you to sign will not be properly designed to cover a promotional products program, distribution or even the manufacturing process. They will be specific to the client’s industry.

A telecommunication company presented a 31 page NDA to an industry distributor. When I was done editing it to provide the full and proper protection for the company and still allowing the project to move forward, it contained only 3 pages! The original version prohibited sharing a new company logo with any third party, discussing the project with anyone not specifically listed in a purchase agreement, excluded several countries of origin, required on site inspections, prohibited reverse engineering and dozens of other issues that had no reason to restrict a promo project.

The client’s legal people approved the new NDA and asked if they could use it with other similar purchases in the future.

In another case a large bank organization presented a NDA that was a bit shorter (only 17 pages). The revised document prepared for the telecom client with minor edits was acceptable to them as well.

In both cases there was some initial friction with the legal staff at the client companies, but the marketing people immediately realized the benefit of having a NDA specifically for them rather than one that dealt with computer systems, international data transfer and equipment warranties! They explained their needs to legal and that was all that was necessary.

Your ability to create exciting programs utilizing the power of Promo Products for message delivery can be limited by some NDAs. Be alert to references to “ideas, concepts, prototypes, designs and other descriptions of creative work", as many of these documents will give ownership of your intellectual property to the client and prevent you from utilizing similar ideas for other clients - even if they do not end up doing business with you.

When you find yourself pitching a larger new client, preparing a NDA that you present can be a strong professional move to get a higher degree of respect for you and your business and may preclude working your way through rambling ‘boilerplate’ documents. 

The protection your client will want is general privacy for any conversations that might disclose plans or other non-public information. The protection you are looking for is that concepts that you develop, that are exclusive to the client, will not be shared with your competitors. Having a lawyer with good business law background review and edit (or draft) your NDA would be a great investment!

What if a workable NDA can’t be agreed on? Tough as it may be to do, protect yourself and walk away! Simply placing an order with a supplier and providing the art file to be imprinted, could likely violate a NDA that prohibits sharing information with third parties.

Using ideas you came up with for another client that are similar to the work you did for the client with the NDA might have you defending the action. When the “hold harmless clause” of NDAs is considered, you become responsible for everyone that touches the order. Your staff, the supplier and their staff and anyone that might casually come in contact with the project. 

You need to ask yourself if a client does not want to have an agreement that is specifically designed for the actual project you are looking to do for them, there might just be a potential problem in the near future. Walk (run) away!