PLH 013 | Non-Disclosure Agreement

Here you are, with a great idea or invention and wanting to explore business opportunities with another company to expand your brand. Then suddenly, when you propose a legally-binding non-disclosure agreement (NDA) at the infancy of the negotiation stages, often even before your initial consultation with them, all communication with them stops. While you should seek proper legal counsel to make sure all terms within the contract are fair, and that first step alone takes up so much time, money and effort—one of the most important lessons we’ve learned through our many years of practical experience as product innovators is that NDAs almost always slow or stop negotiations if you propose them first. Despite its popularity, filing an NDA, also known as secrecy agreement (SA), confidential disclosure agreement (CDA), or proprietary information agreement (PIA) has its drawbacks. It can sow distrust between parties, foiling a mutually beneficial relationship before it matures. Learn how NDA’s can put you in the wrong position for getting your idea presented in an open-minded standpoint, and discover smarter ways to protect your intellectual property with or without an NDA.

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We are going to talk about to NDA or not to NDA. This is something we have a lot of experience in. Some people might not even know what NDA stands for. Let’s define Non-Disclosure Agreement. You may have heard this many times of people advising you, “If you’ve got something new and you’re going to talk to somebody, have them sign an NDA, a Non-Disclosure Agreement, so that they won’t disclose it to the public.” We have this process that we go where we want to keep legal out of any kind of negotiations or reviews when we’re in early stage talks with a company, whether they’re going to be a client, whether they’re going to be a licensing partner, whether we want to sell them our designs.

The sooner you get lawyers involved, the longer it will take. I don’t say that to be mean to lawyers, it’s just a part of the process. When you get a legal department, or you seem like a hassle, you’ve already put yourself in this adversarial position. It’s like, “You want me to sign what?” They don’t like you and they’re not open to your idea and they’re not open to your product and it’s going to start things off badly. That’s where we say, “We understand protection and we want you to be protected and we want ourselves to be protected, but we want to also do it in a way that makes business flow faster.”

I want to take a step back and be very transparent. In the beginnings of our careers more than 25 years ago, we definitely subscribed to the non-disclosure agreement process and we were on the bandwagon. We definitely did. Even though my stepfather’s an attorney, he’s a different kind of attorney. Not a corporate contract attorney. We definitely had an attorney in our business, in our ttools business with the stylus pens in the Palm economy. We had an attorney back in college. We had been inventing things and had a patent attorney back in college. When you have a patent, you always worry about, “I’m going to disclose this patent and how does that affect my ability to get a patent?” I think often, even still today, patent attorneys and other kinds of attorneys, if you’re going to disclose something proprietary to anyone outside of your company, might suggest have a non-disclosure agreement. We want to preface this with we are not an attorney. The advice we’re giving is for your reference and for your information. We’re giving you our opinion from our business experience and how we operate so that you understand how we operate.

In the early days, we definitely did. Any new invention, we had people sign a non-disclosure agreement, especially if a patent had not been issued yet and more importantly, even if it had not been filed yet. We did that with Palm Computing, at the time it was USRobotics, where we had them sign a non-disclosure agreement when we shared with them the original prototype for this invention, which was the stylus pen. We talked about that in the very first Office Hour episode. We definitely did it and we believed it was important. Over many years of practical experience, our opinion on this has evolved. What we’ve seen is that depending on the size of the corporation, it can slow down the process. Depending on the perspective of who you are giving it to, they can be like, “It’s not worth hearing your idea. I’m not signing any agreement.” We get a lot of people who are like that over time.

PLH 013 | Non-Disclosure Agreement

Non-Disclosure Agreement: When you get a legal department involved, you seem like a hassle, and have already put yourself in an adversarial position.

What we’ve come to saying, even proposing to use a non-disclosure agreement, it can already set you in the wrong position for negotiations or the wrong position for getting your idea presented in an open-minded mindset. That’s what we want. We want them to be open-minded and excited and interested in hearing our idea. We’ve switched to practicing, “Let’s file provisional patents instead of non-disclosure agreements” because in the provisional patent, once it’s filed, your protection is starting. I know there’s lots of legal arguments as to how that governs, but as far as we’re concerned, we go in there with this confidence, “We filed patents and it’s going to issue,” and we have a 95% issuance rate. There was only one patent that we ever filed that didn’t issue and it’s because we didn’t file it, we didn’t write it. Some other company that we developed it for did and we told them it was terrible and they didn’t listen. We weren’t in control of the process.

In the early days, we didn’t have the experience to know the difference of what a good patent application was and what a not so great a patent application was. We do have a lot more experience with it and when we read a patent application, we can tell if it’s got teeth, if it doesn’t, if it’s got a likelihood of being issued as long as some other prior art doesn’t show up in the process. This is part of our process. We do a lot of research. We do prior art research. We do a lot of it ourselves because we want to make sure that we’ve Googled it, we’ve Amazoned it, we’ve checked all the places in which it can be. There are patent libraries out there. There are online Google patents. It’s easy to use.

You should do your check and I cannot tell you how many times I get an inventor in front of me who says, “I want you to sign a non-disclosure agreement,” and I Google what they say and I’m like, “No, it’s publicly available and you’re already coming to me and asking me to sign something because you think this is such a secret. You haven’t even done your homework yet.” That’s where people are in this position. They’re like, “I’ve heard it all.” We get a lot of companies and corporations who believe the Not Invented Here Syndrome. That’s what we call it, NIHS, Not Invented Here Syndrome, because they’re already like, “I don’t want to hear any new ideas because we’ve heard them all and if I have to sign a non-disclosure agreement to do it, then I can’t capitalize on the ideas we already have going on in our organization and I’m not going to start there.”

Let’s talk about why this happens from the perspective of the company or businessperson you might be disclosing your invention or proprietary product to. You want to present an idea to us, you supply me with a non-disclosure agreement. If it’s anything more than a one pager and truly mutual, meaning that the conditions on which I’m agreeing to not disclose it are also conditions under which they are applying to you as the discloser, as well as to the person you’re disclosing them to and if they’re not very basic broad-brush, meaning, if I’ve experienced something before, if I’ve seen something that is the same, I don’t have to keep it quiet. Basically, I don’t have to keep this confidential or if it ends up becoming public without me making it public, if it becomes public some other way through another party, then I don’t have to keep it confidential.

The same things apply to you. If it’s a one-sided agreement where it’s all on me, I can’t disclose it for years or in perpetuity for any reason, I’m never going to sign that. If it gets beyond a one-page agreement and beyond our ability as seasoned businesspeople to evaluate if this is reasonable or not, if I have to get my lawyer involved to review this before, I’ll be able to sign it and then have this meeting for you, which a lot of times as an initial consultation that isn’t costing you anything, then I’m not going to go spend money with my attorney to go and get that approved.

That’s also where we draw the line too. It’s like, “If you’re having a free consult with us because you want our expert opinion and those kinds of things, and then you want us to sign a non-disclosure agreement when that could prevent us from helping other people, then we won’t do it.” It’s one of those things which we’re like, “If you’re contracted with us, we already have it in our contract. It’s confidentiality, non-disclosure, all of those things are built into our contract,” but when you’re not even paying a dime for someone to review your idea yet and you put all this legal stuff in front of them, it makes them go, “I don’t think it’s worth it.” If I’ve got to go spend money from the get-go in order to have even an initial conversation with you, that makes me a lot less motivated to want to have that conversation.

Let’s take it if it’s a big corporation. A big corporation that a lot of different inventors or companies are pitching ideas to them or products for them to buy or intellectual property or something to buy, whatever the business arrangement might be, you bring them a non-disclosure agreement. First of all, you’re wanting to get time with someone, presumably an executive at this company. It’s been hard enough to get to that person. When you finally get through to them and schedule the meeting, if a prerequisite to that meeting is you want them to sign a legal document, that puts on the brakes in a hurry. They got to get their legal department involved and like Tracy said before, you’ve changed the tone of the conversation from building anticipation, “I have something wonderful. It’s going to help your company. It’s a big opportunity for your company. Don’t you want to see this?” To then, “Hold on.” It sets up this ego situation. “I’ve got this amazing thing. You’re just a company. You need to sign it before I’m going to disclose it to you.” Here you are trying to get a meeting with somebody. It changes the tone of the conversation, it changes the mindset from anticipation and excitement over what you have to being defensive, being apprehensive, considering all the risk before you even get to what the sizzle is that you’re going to show them.

I want to preface this by we’re talking about this as an entry thing. There are times at which you contract with someone, you’re going to go in and you need information from a factory, from other places, and you’re going to dive deeper into that non-disclosure agreement. What we’re talking about is that’s the first thing you ask and I get it all the time. It happens to me. They’re like, “I want to consult with you. I need your expert opinion, but I need you to sign a non-disclosure agreement.” I’d be like, “Then you have to pay for my time because it’s inherently in my hourly rate that I will have that covered.” We want to make sure that your first pass is not putting up a blocker to you getting value back from it, for you to get that meeting, for you to be able to build a relationship and anticipation on hearing your full idea.

No attorney likes the language that any other attorney creates from the get-go. They want to put their own mark on it. Share on X

Now, we don’t want you to disclose stuff, you shouldn’t. Be very careful. There are probably a lot of ways you can have a conversation with your product without disclosing what’s truly proprietary you’re trying to protect. Maybe that’s an approach you want to take if you do feel you need a non-disclosure at some level, find a way to talk about it where you don’t. I want to talk about the lawyer situation. I like lawyers. I have family members that are lawyers. I have good friends that are lawyers. My kickboxing coach is our attorney and he’s a great person, but attorneys are always going to take a certain approach. Here’s what it is. If their client is given a non-disclosure agreement from a third party, they immediately don’t trust that language. They want to review it and make sure it’s right and here’s the reality of attorneys.

We’ve learned over a lot of hard experiences that no attorney likes the language that any other attorney creates from the get-go. They all would prefer that contracts are written their way with the language they would use, not the language someone else would use. You get the situation where you have a lawyer for each side negotiating, discussing, working out the language between the two of them of what this document is going to be that’s going to satisfy both sides. It brings everything to a screeching halt to work this out. Maybe in two, three weeks or a month, you’ll be able to have this business conversation you want to have in the first place. It’s been our experience that if you truly have something proprietary worth protecting, that you’re that concerned to have somebody sign a non-disclosure agreement, we find it’s much less expensive and a path of least resistance that if it’s that important, we’re going to protect it.

We’re going to file a copyright on it or a trademark on it or we’re going to file a provisional patent application, which is quite inexpensive compared to a normal patent application. Once you filed it, you have a date that you’ve solidified that if you’re the first to file for this invention and you must believe that you are. If you’ve gone ahead to spend the time and money to file an application, you’re the first to file so you have some inherent rights assuming your patent gets issued down the road in the long run. If it doesn’t get issued, you didn’t have anything to protect in the first place. File that provisional application and we feel very comfortable and free to disclose the invention at that point.

What that looks like is we usually go in the meeting. We get them energized, we talk about the marketing opportunities, the gap in the market, what the product feels. We do the same emotional thing you would do with someone you want to make that connection, with someone who might want to consume it, the buyer. We set that up and then when it gets talking to the details and they start asking that details, we act either confident in the fact that, “We’ve already filed a provisional patent and we’re confident that we’ve got this. We’ve done our research and we’ve done our homework and we are absolutely sure we have something that is going to issue, yes, we’re happy to talk to you about that in detail,” and/or you say, “Some of this is patented and some of this is proprietary. I don’t feel comfortable disclosing every single detail in our how-to. Let’s have a follow-up discussion after we further solidify our relationship.”

Either file a letter of intent, get to the next stage, contract together, and then we’ll go forward. On the flip side of that, when somebody is presenting to me and they’re stepping over the line to something I don’t want to hear because that can happen also that sometimes I’m like, “I think they shouldn’t be disclosing this to me.” I stop them, and I say,” I think we need to stay in the why and the how and not in the what. We’ll come back to that when the time comes.” I try to be cognizant of that and be good about stopping people from talking about that and saying, “Your lawyer probably wouldn’t be too happy if you disclose that to me right now.”

Not everybody’s like that. You have to be careful because sometimes, if you’ve ever watched Silicon Valley or any of those TV shows, you see how they go in and they’re there for a brain session because they’re going to invest in you and they start disclosing all the how-to and they steal it all. A lot of that stuff in software especially is not patentable nowadays. It’s hard to get an issued patent in almost anything software-related right now. Process patents can happen in things like that, but when you’re talking about that complex, that proprietary knowledge is extremely important and you want to keep your secret in there and wait for that non-disclosure, but you want to bait them and get them excited to want that. To feel that you’re the only person who can deliver that to them and so you want to get through that stage of that before you head into it. Then it’s the time to have a non-disclosure discussion but make it their idea.

There’s another thing I’d like to share with you in terms of this whole issue of to have an NDA or not to have an NDA. That is practical reality. Generally, if you want someone to sign an NDA in order to disclose your proprietary subject matter to them, you’re most often a smaller fish in a bigger pond. You are the David and they are the Goliath. That’s most often the case. There’s a little bit of difference there in the model of maybe you set up a platform, you’ve got a whole product that’s going to have third party developers work on it, now, you’re the big fish in there because they all want to develop with you. There’s an obvious non-disclosure agreement involved in that. “You want this opportunity. You’re going to be a part of that,” but you have to be sure that you’re that big fish in that process and it can also work that way when you’re working with factories and you’re going to bid out with factories.

Regardless of whether you’re the little fish in this scenario, you’re the David or you’re the Goliath, here’s the reality of it. You sign a non-disclosure agreement. You both sign it. You then discover or suspect that the other party who signed the agreement breached the agreement. They had disclosed it and they shouldn’t have. Your entire remedy to cure that breach is to sue them. That’s the only remedy you have to force them to perform on that agreement or to enforce that agreement, you’ve got to sue them for breach of contract, have some damages that you claim that you incurred, and then to try to sue them for money to cure that damage, to compensate you for that damage, to cure that breach. That is a very long process. It is not fun and it’s very costly and you’ve got to put up all the money to wage that fight and the burden of the proof is on you, which is hard to find the disclosure, see the emails to all of those things that may have occurred in that disclosure and it has happened to us.

It has happened where we’ve showed somebody something and then we suspected they’ve disclosed it because we heard from some other person in the industry that came around to us that we were talking to this to some other companies. They were offended because they weren’t first and that’s how it happened. They were like, “How come you didn’t give this to me first?” That’s an interesting dynamic and one of them was our customer and he comes back to us and says, “Why didn’t you give this to me first?” The reality was he wasn’t best poised to exploit it and to get it to market, the other company was. That’s why we went to them first, but now we’ve hurt our relationship and that’s an intangible damage.

The reality is we go to the company we disclosed it to and says, “We understand from this third party, you guys disclosed it.” They said, “I don’t believe we have. What’s your evidence? Proved to me that we disclosed it?” They’re right, the burden of proof is on us. It’s very hard to get that proof. You can see how this becomes complicated. You sign an NDA, both parties and you have this level of comfort. “I’m protected. They’ve signed an NDA.” Are you protected? The reality is you’re only protected to the extent that you have the money to try to enforce that contract, to sue them for it. That becomes a no-win situation. We always believe much more practical to protect ourselves in the most practical way possible.

PLH 013 | Non-Disclosure Agreement

Non-Disclosure Agreement: If proprietary knowledge is extremely important then you want to wait for that non-disclosure.

Most often, we found that filing an appropriate intellectual property application for whatever it is, copyright, trademark or a patent for a product and then have the confidence that we know we invented something novel here and ultimately, we’ll get a patent for it and then we’re free to disclose it. Keep in mind too when it comes to patents, even though you’ve filed for a patent and we live in a first to file world here and that’s maybe another subject we’ll take a deeper dive into. If you filed an application first, it doesn’t matter if anybody filed for an application after you. If you’re the first to file and it is truly a worthy invention, you will get your patent for it. You will ultimately have the exclusive rights to manufacture, import and sell that item.

Be satisfied with that and go on and move forward and freely disclose it. Keep in mind, even though you’ve filed a patent application, until it issues, when you disclose it, anybody else absolutely is not violating the law. If they’ve seen what you’ve disclosed to them, they work faster than you manufacture it and bring it to market and sell it sooner than you, they’re allowed to do that. Once your patent issues, then they will be infringing on your patent if they truly are selling, marketing, manufacturing, importing something that infringes on your patent. You’ll be able to stop them at that time, but you don’t have the power to stop them until your patent issues.

Usually, it’s enough of a deterrent and a big risk for any other company to go ahead and do that because they got to invest a lot of money, put a lot of resources into it, buy inventory, distribute it. To unwind that or to have risked that money and then not be able to sell it eventually down the road is usually enough of a deterrent to keep a company or a factory or any other third party from going ahead and willingly violating the potential of your intellectual property. Usually, even factories we find respect that. That’s our broad take on NDAs and how we use them and how we operate. We were clear here. We want to set up a position in which people are open and excited and we want to find if there’s a joint venture possibility, a licensing possibility. We want to find that excitement in the process. It’s hard to do it when you got all these legal hurdles in front of you, and that’s what an NDA feels like for most people and for most companies.

It is a time lengthener, the opposite of a time-saver and we don’t want that. We want timely information. We want to get, “Are you the right partner? Are you not? Are you the right factory? Are you not?” You want to move quickly. You want to get down to business and profit. What we find it’s not the most expedient way to do business at this point after a lot of experience. There are different businesses, different types of models of business where there’s lots of proprietary information. Software companies, as I refer to, apps, all of those kinds of things operate in a totally different model. We’re talking about specifically for consumer products and our experience doing consumer and industrial products because we’ve done those, hard goods. Something that you would file a patent for that are more tangible, that don’t necessarily have as much proprietary knowledge in how they’re produced or made or developed and brought to market. We want to make sure that you’re clear on that.

We have a couple of questions that have come through the platform ahead of time. Someone wants to know if we have a mutual non-disclosure agreement that we would be happy to share and we do. We have what we have used in the past and experience and believe is a truly mutual non-disclosure agreement. If you do feel, for your own business purposes, that you need to have someone or you want to have someone sign an NDA or maybe they’ve sent you one that’s very one-sided and you want to come back with one that’s truly mutual, we do have an example. It’s in our resource library in Product Launch Hazzards. Keep in mind, we want to preface this. We’re not attorneys. We are not providing legal advice. We’re providing practical business experience, opinion for you to consider. That document is available if you’re going to use it long-term. You may want to have your attorney look at it because maybe in your state, there are some unique aspects to the law in that state that are not addressed in the example document we’re giving you. It’s meant to be a starting point and an example.

We believe it’s a good one. There are tons of flavors of non-disclosures. There are some that deal with arbitration, there are some that deals with actual penalties of disclosure and ours is not. Ours is very straight forward. It’s simple, one-pager or not even a full page. It’s like three-quarters of a page and it’s about when we use it. It’s the same language with the same contracts. Confidentiality and non-disclosure go hand-in-hand with what we do, which ties to the second question that we have. The second question is, “I noticed that when I booked an appointment with you, you can book an appointment one-on-one and this was a free consult, that you had me click that I’m agreeing to the terms of service and privacy policy.” We do it a little bit different in the Product Launch Hazzards group. It’s not a non-disclosure per se, it’s a code of conduct.

We expect to have, “I’m evaluating doing business, I need expert advice from you.” We expect a code of conduct among our members and our experts especially, we expect a code of conduct that we’re holding everybody’s information confidential. If we don’t believe it’s private, if we don’t believe it’s confidential, we want to disclose that to you and let you know, “I’ve already heard this before from about five other people or I Googled this, I checked it on Amazon and I found something that’s exactly like what you were talking about.” We had that happen to a client where they thought they had an original idea and I Amazoned it and there it was. The feature was a significant part of what this other company was promoting and so they were devastated, but at the same time, sometimes that’s a good thing to have competition.

It showed that there was value in what they wanted to do, and in the process, we came up with some other invention that was even better and built off of that in a much better way. It’s not a done deal like, “I should quit.” Not always. We never believe in that. That may mean there’s a market for it, which is more important than anything. We want to encourage people to feel comfortable that this is our code of conduct so we have that in our own booking calendar. Not everyone does, but this is the way we operate. I want to feel happy to have an open conversation for the 30 minutes that we might have a conversation to see if we’re a fit to do business together and see if you want us to do a strategy session or want us to design for you and take your idea.

PLH 013 | Non-Disclosure Agreement

Non-Disclosure Agreement: Until your patent issues, anyone making your thing is not violating the law.

We want that evaluation timeframe and we want you to feel free to discuss it because we have had it happen and this is built around having had a bad experience with someone who’s so paranoid, refuse to share their information even though I signed a non-disclosure with them, which I didn’t want to. We went that far, and we’d already had a couple conversations, so I finally signed it. He didn’t disclose everything. He started to disclose the category, the type of product. You Amazon sellers out there are pretty paranoid and that’s one of the reasons we don’t sell on Amazon anything but 3D printing tools so that it doesn’t trip on anyone else’s stuff.

He was paranoid. It was in the beauty tools category and didn’t disclose it. Disclosed enough for me to go, “We can handle this project and here’s the right quote for it,” but it wasn’t until he signed the contract, paid for it, and came in that I realized that he didn’t have a good product and I told him that and tried to say, “We don’t want to do this project. We don’t think we can cost this out for you.” I tried to refuse the project so many times and he kept coming back saying, “No, I want you to do this.” He kept insisting to move forward and sure enough, it took six months. A long time and we couldn’t get a single factory to do it and then he insisted on a refund. We were like, “Forget that. I’m not going to sign this and I’m not going to do this until we’re sure that we’re a fit already.” That’s why we have that code of conduct terms of service and that’s why we operate that way, so you can feel a little level of comfort in which you can disclose enough of your content to be able to be sure that, “We understand the product. We do think we can help you. We are advising you properly.”

If you don’t give us enough information, we can’t advise you either and we don’t want that to happen. That’s our policy on the site. It’s written, and we want you to review it. We remind you of that when you make a booking appointment with us. It’s also part of when you come and become a member, this is a point we want you to review and we push that out to you so that you do review it. We expect everyone to be confidential, but we also want you to be aware that the membership group is a public forum. If you’re typing things in, you’re disclosing things you shouldn’t, it is on you. You must be aware that you are doing that and you have to think carefully about that. That’s why you might want to have a one-on-one. That’s why you might want to go offline and meet specifically with the experts because this is a chance for you to ask those general questions, not a chance for you to get specific about your product unless you can. We were talking about before, you have a patent and you’re happy to talk about it. You’ve filed something and you have no fear of not being able to get your patent eventually. Once you filed it, you’re as protected as you can be and you may as well disclose it.

In most cases, there are ways for you to ask questions that get at the heart of the issue or close enough to it without disclosing what is proprietary about your product that can get you enough of an answer to move the ball down the field or build enough of an excitement. To get to that point where, “I have enough confidence in that answer. That’s helped me with my problem, my question, and now it is worth it to me to go to the next level with one of the experts or with another third party you’re working with.” We’re here to help in any way that we can. We want to help move business forward for each and every one of you and help you achieve your goals and prevent you from falling into one of these major pitfalls that might set you back. There probably is a good way to ask your question to get some help prior to needing to disclose something truly proprietary. That’s why we remind you of those every time you book an appointment with us, make sure that you are very aware of that and thinking about that as you’re going into the conversation.

The last question that I have is about factories. The question is, “How do we handle confidentiality and nondisclosure with factories?” Frankly, we don’t. We do when we’re manufacturing with someone. It’s built into our contract, but we don’t when we’re trying to build samples because it’s too hard and then they won’t build samples. It is very hard, especially in another country, and maybe even hard enough in the US, if you’re a US-based a person. It’s very hard to make sure that a factory is going to keep something confidential. Ideally, you would be working with a supplier or a factory that values your business and is a company or has people of integrity that will keep it quiet because they value the relationship and the potential business with you more than their own self-interest if they were to go and copy it or give it to somebody else. More often than not, that is the case, but it’s very hard when you’re sample making.

That’s why by the time you get to quoting something, sending out drawing specifications, CAD files or whatever they are, where you’re going to get quotes and build samples that you’ve already protected yourself as much as you’re able to and you put those factors on notice that, “This is patent pending or we’ve copyrighted this.” You have to put that on every drawing, every document you send. Make sure you do that. Logos or brand identity, whatever it might be, trademarks, if it’s more private labeling something than making something new, then it’s more in the copyright and trademark area, but that you want to put them on notice that this is pending or filed or issued, whatever your situation is.

Most often, they will respect that. In fact, in this day and age, it was different maybe twenty years ago, but now, we even find a lot of Asian factories, they’ll even come back and say, “This thing you want us to quote, have you patented this? Do you have the rights to this? Is this yours? Or are they copying something?” They’ll actually ask us that if they’re a good supplier. We had that happen when we sent the clients’ actual products that had been made in Mexico, physical product, and we sent it over and we said, “We want you to copy this exactly.” They were like, “Are you sure you want us to copy this exactly?” We’re like, “No, this is our clients’. We do. We absolutely do.” We had to clarify that, and we thought, “That’s a good sign of a good factory.” It gave a big check mark in their favor for us to want to work with them because they think about that.

We’re going to do a whole thing on prototyping. We have some different strategies that we use. It’s one of the number one reasons why we use 3D printing, why we break up sometimes our samples at different factories. We might do a part at one and a part at another. There are other reasons to keep confidential what you’re working on and ways to do that. We’re going to talk more about that in that prototyping episode. We want you to know that there are other ways around it and non-disclosure is, “Are you going to be able to enforce that in Asia?” It doesn’t work in Canada, or wherever it might be, who knows.

From a practical business reality perspective, all we’re saying is don’t set yourself up for this and have this false sense of security that because you’ve signed an NDA, you’re protected. Maybe you are, maybe you’re not and I find most often, maybe you’re not. There are those who say that same thing about the contract side of that, but sometimes though, being clear in communication about what you’re expecting from them, including, “We are expecting you to hold this confidential because we have a patent on it.” Making sure those kinds of statements are given and exchanged. Those are important and don’t skip that. A lot of times in these relationships where you’re considering an NDA or you’re going to go to a factory and have them quote something or have them make a sample, setting up proper expectations from the start goes a long way to you ending up getting the results that you’re looking for.

Setting up proper expectations from the start in a business relationship goes a long way to getting the results that you’re really looking for. Share on X

We appreciate your time. We hope this was helpful for you. We appreciate the questions that came through. The people who sent in these questions, sent them through ahead of time, which you can do in the membership group. If you’re a Product Launch Hazzards member, you can send the questions in advance so you don’t have to be here live. You can also join in live, participate in the conversation and ask us follow-up questions, ask us to deeper dive. Make sure that you’re checking the membership group to be sure you know when the next topic that you’re interested in is going to go live.

Remember, there are twelve experts. We’ve got lots of different topics and lots of different areas every week. We will have an attorney cover this in their viewpoint as well. There’s always going to be a different viewpoint. There’s always going to be some different things. We want to show you things from the expert’s sides, from the practical side, from being the customer, from being the consumer. We want to bring you all those viewpoints. Be sure to ask these questions because that’s the way in which we can do that best. We want to serve you in however we can make that more relevant, that’s one of the best ways.

Tune in to Tom & Tracy’s next Office Hours. Connect with and find out more about Tom & Tracy in the Experts Directory.

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About The Authors

PLH 001 | Product Launch ExpertsTom Hazzard

An inventor with 37 patents and an unprecedented 86% success rate for consumer product designs, Tom Hazzard has been rethinking brand innovation to design in success for over 25 years. Tom’s patented innovations provide entrepreneurs and businesses of all sizes a system to spread their brand, grow valuable consumers, and diversify into higher converting revenue streams without a lot of time, cost or effort. Tom is co-host of the Forbes-featured fast growth WTFFF?! 3D Printing podcast as well as host of two new podcasts, Feed Your Brand & Product Launch Hazzards borne out of his core business, Hazz Design, where he has designed and developed over 250 products that generate $2 Billion in revenue for retail and e-commerce clients.

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