Don’t Ask For An NDA Right Away When Pitching — Do This Instead

February 20, 2024


Jim Pooley was quoted in an edition of Forbes on February 20, 2024. His comments are presented below, and you can read the full text of the article by clicking the "Read Article" button.

This is what international trade secrets expert, IP Hall Of Famer, and attorney Jim Pooley refers to as “progressive incremental disclosure.” There’s a conundrum, he points out, when you’re up against someone who doesn’t want to sign an NDA and you need to encourage them to do so without spilling what it is that you want to keep confidential.

So, here’s what he tells people to do.

“Tease the recipient with information about whatever it is that you have that doesn't have to be kept secret. So, for example, you can tell them what the output is and be very precise about it in a way that will be enticing to the person,” he explains. “You sort of peel back the various layers of sensitivity going down towards the kernel of what's really innovative. You can get people to the point where they'll say, okay, boy, that sounds really interesting and to get any farther, I'm going to have to sign an NDA.”

(This strategy won't work with certain classes of people, like venture capitalists, he added, who are famous for never signing NDAs.)

Basically, what you’re trying to do is build trust as you approach each other. Imagine a middle school dance, Pooley said, with girls and boys lined up on opposite ends of the gymnasium floor, slowly figuring out how to engage by reading each other’s body language until the point where they’re holding hands and dancing. The process of getting an NDA signed is not that different.

NDAs that include language regarding reverse-engineering are becoming more common, Pooley said. “But it is an aggressive ask depending on the circumstances,” he added.

NDAs help set a professional tone. I highly recommend having a legal professional draft an NDA that addresses all of your needs. Pooley laments that NDAs are often treated as a form to fill out, when in reality they are a contract — and “contracts have consequences.” A lot of the terms can vary, including the definition and breadth of the confidential information.

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