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Non-Disclosure Agreements

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Covering Your ATS applies to more than software engineers.

By example, a broker and a software engineer develop a new computer system containing a novel matching process for their start-up ATS. They may sign a non-disclosure agreement forbidding either party to disclose without the other party's consent. If the software engineer tries to use the novel matching process in a side business, without the broker's consent, the broker may sue the software engineer for misappropriation of the trade secret.

To further protect the innovation, the software engineer and broker may require anyone they share the information with to sign non-disclosure agreements. If a financier is interested in investing in the technology, the software engineer and broker may require the financier to agree not to disclose or use the matching process trade secret. If the financier starts a new business using the novel matching process, in a way that violates the non-disclosure agreement, the software engineer and broker may sue the financier for misappropriation of the trade secret and breach of contract. However, if a third-party investment bank independently develops the same matching process, the software engineer and broker cannot stop the investment bank from marketing their process.

This is a good description of what a non-disclosure agreement does, and its defects have to do with the generality of the original article.

That non-disclosure agreement needs careful drafting so as to provide the protection expected by the parties. Yes, get a lawyer to do this. Is a lawyer necessary? Not really but having a person who can is not immersed in the deal gives you someone who view the deal critically and find any flaws in the agreement.