Q: I have been asked by the founder of a startup to sign an NDA without a time limit.

He argues that this is proprietory technolgical information which they expect not to lose value in the foreseeable future.

Is ten years a good counter proposal ?

1 Lawyer Answer

A: NDAs will be governed by state laws, so it will really depend on which state you are in. But let me just give you some general thoughts on the subject.

As you probably realize, anyone who is starting up a business is overprotective of their proprietary technology. It is their baby. It is their blood, sweat, tears, time, and money. Being dismissive of their concerns (whether you view them legitimate or not) will undoubtedly get you on their bad side. You need to address their concerns.

Their concern is their baby. They are not trying to prevent you from finding a job afterwards, or doing a similar job for someone else, or using your skills after your engagement. On the other hand, you are interested in being able to use your skills after the engagement, being able to find a job afterwards, but you are not trying to steal their baby.

I think that the better way than the 10-year limit would be to say: “Of course I will do whatever is needed in keeping your technology secret. That’s a given. However, I want to make sure that this document does not prevent me from doing something similar for a different company, or prevent me from practicing my skills/expertise in the field, or prevents me from getting another job to feed my family.”

With regards to any intellectual property generated by you during your engagement with the startup, the approach that I’ve used in such cases (on whichever side I was on), was to divvy up the IP along the lines that make the most economic sense. Whatever solution you make for them, whatever product you develop for them would belong to them. But the method in which you solved the problem would remain with you.

Good luck!

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