Modification date: October 3, 2020

NDA in Software Development: Protect Your Business’ Confidential Information

logo
Syberry

NDA in Software Development: Protect Your Business’ Confidential Information

Disclaimer: This post is intended for informational purposes only and may not be considered legal advice. For legal advice that is specific to your situation or project, we recommend talking to your attorney.

Contracting with third-party vendors to support any business processes — from marketing to finance to leadership consulting — requires sharing some amount of confidential information with outsiders. The nature and quantity of that information varies depending on the vendor’s role, but it’s especially significant for companies working with custom software developers to create new systems that will help run and grow the business.

The software vendors will need access to information about business processes, the intellectual property underpinning existing systems, product roadmaps, and perhaps even customer and financial data, for starters. As this is sensitive information, it stands to reason that companies will want to find a way to protect it, ensuring the software developers (or any vendors who will need access to company “secrets”) cannot share it with any other parties without explicit permission.

For that, we recommend a nondisclosure agreement.

What Is a Nondisclosure Agreement?

A nondisclosure agreement (NDA) is a legally binding document that is executed to protect the confidentiality. When one party is asked to share confidential information with another, the sharing party can ask the recipient to sign an NDA indicating their commitment to protecting that information — and establishing consequences should the recipient breach confidentiality.

When Do I Need to Ask for an NDA?

It’s a common practice to sign NDAs in software development, as a developer needs a lot of insight into the business in order to design and execute a project. At Syberry, our clients often ask us to sign NDAs before any detailed conversations about a project take place, beyond just general ideas. And we’re happy to oblige. There’s nothing more important to us than our clients’ trust.

In return, we often ask clients to sign NDAs, themselves, so that we can share some of our own confidential information with them, including information about previous experience and similar projects (to the extent allowed by our agreements with other customers). When this is the case, we want to be sure our new clients aren’t going to distribute or use that information for any purposes unrelated to our project, just like they want to be sure we won’t distribute or use theirs inappropriately.

When both parties are requesting the other to sign an NDA, the two parties can sign a “Mutual NDA” instead — one document outlining both parties’ obligations to protect sensitive material.

Is an NDA Ever Not Necessary?

An NDA isn’t always necessary, especially when two parties are just beginning conversations and discussing a project in general terms. It’s not until you get into the weeds about the details and begin discussing scope of work or software requirements, that it’s likely sensitive information will be shared.

What Should an NDA Include?

Every NDA will look a little different depending on the nature of the parties and of the information being shared. However, there are several components that must be clearly defined:

  • Confidential information: What information is being protected? Only documents? Only information shared in writing? Or information shared verbally, as well? Furthermore, what isn’t confidential? Information that is already public knowledge, for example, doesn’t need to be protected under an NDA, so it should be explicitly carved out of the agreement.
  • Ownership: Who owns the information being shared? If either party’s IP is owned by multiple parties, all parties (and their business addresses) must be listed, along with the names of anyone with the authority to execute the NDA on behalf of their principals.
  • Information handling: Who has the right to handle confidential information from either party? Is it only the leadership that’s eligible to access confidential material, or can other employees see it, too? For example, can the project managers and developers assigned to a client’s project have full access to the materials? This section may contain specific names or refer more generally to a group of people involved in the project.
  • Duration: An NDA must outline a finite duration during which it is valid and enforceable. The industry standard is up to two years, but this term can be longer or shorter.

What Red Flags Should I Look for in an NDA?

If you’re ever in doubt about a term or clause in an NDA, we recommend reaching out to your attorney for help getting it just right. But here are a few things to keep an eye out for when reviewing an NDA someone has asked you to sign — or when writing one yourself for someone else to sign.

  • Overly broad language: An NDA must be specific in identifying the protected information. If it’s too broad, that may make it difficult to enforce the contract, and it may even make it difficult for the signing party to operate their business if too many non-confidential materials fall under its umbrella. Usually, it is considered good practice to include only to the IP related to a specific project.
  • Perpetual duration: While it’s ok for the NDA to survive the engagement by a period of time, if it lasts in perpetuity, it’s overreaching.
  • Legal violations: An NDA may not contain terms or rules that violate existing legislation or regulations — or that would force either party to violate those rules.

A good relationship between a client and a software vendor is built on trust, and either party should be happy to acknowledge its dedication to protecting the other party’s sensitive information. An NDA is a powerful way to do just that.

Publication date: May 11, 2020

Explore More Resources:

What our customers say about us

Syberry has provided satisfactory services thus far, and they are very responsive to any issues that arise. The team also possesses strong communication skills. They delivered a functional piece of software at a reasonable price, and they've managed the project very well.

Richard Harkness

CEO, ADEPT Driver

Elk Grove, CA

How we help ADEPT Driver Company

We developed a web-based driving simulator for teens and another for adults. The products run on Chromebooks, and the team added features that enable them to measure a driver's ability to avoid a crash.

Technologies used

I don't think you could find a better company to manage and build your project. I get so many compliments on my application, and it has a lot of unique and complex development.

Todd Surber

CEO, PIXRIT

Charleston, South Carolina

How we help PIXRIT Company

A photographer approached us to build a web-based software platform that combines the fastest social media manager with state-of-the-art galleries and provides the ultimate tool for photographers to upload, store, back up, and share their photos and manage their SMM activities.

Technologies used

The user-friendly software hasn’t encountered any issues or bugs in more than three years. It’s high quality has helped grow the clientele. Straightforward and consistent in communication, Syberry met every deadline and ensured a hassle-free development process.

Vince Hughes

Owner, Steel Estimating Solutions

Knoxville, TN

How we help Steel Estimating Solutions Company

Our client was inspired to create a product that helps steel erection companies perform faster, more efficient estimations and bids. We developed original proprietary software from the initial concept.

Technologies used

The new platform received positive feedback and performs better than its predecessor. Syberry communicated the project’s progress to their partners well by breaking down their steps and utilizing a management system. Most importantly, they delivered world-class service for a cost-efficient price.

Bill Fahy

Owner, FDI Creative Services

Houston, TX

How we help FDI Creative Services Company

Following strict regulations and requirements, we used AWS to develop a custom e-commerce web app that includes shipping integration. Since the site’s launch, the team has continued to make updates.

Technologies used

The application was delivered on time and within budget. Syberry explained their process thoroughly and accommodated to scope changes effortlessly. Their stellar project management, highly responsive communication, and proactive attitude set them apart.

Ricardo Casas

CEO, Fahrenheit Marketing

Austin, TX

How we help Fahrenheit Marketing Company

We developed a large, complex .NET application with various third-party integrations. The team built the software from scratch based on existing wireframes.

Technologies used

The end solution exceeded the client’s expectations. Syberry delivered high-quality products on time and at outstanding value. They provided frequent updates and repeatedly sought feedback at each stage. Customers can expect a highly experienced team that easily translates concepts into solutions.

Rudy Milkovic

Executive Director, Velicom

Austin, TX

How we help Velicom Company

Our team built video streaming software as a web and desktop app for a third-party client. We completed end-to-end development—from scoping to feedback cycles to QA—using PHP and Wowza Streaming Engine.

Technologies used

Syberry has successfully improved the frontend performance of the platform and continues to make thoughtful suggestions for enhancements. They have proven to be communicative and reliable, mitigating the common concerns of outsourced teams. Syberry remains mindful of business goals and client needs.

Cory Kowal

VP of Products, THG Energy Solutions

Tulsa, OK

How we help THG Energy Solutions Company

Taking over for another vendor, we served as the ongoing software engineering partner for an energy company’s cloud-based platform. The company provided scoping, development, testing, and deployment services.

Technologies used

The added team members sufficiently fulfilled the needs of the project. The product was successfully launched and has received positive feedback. Syberry continues to be a supportive partner in development. They provide an impressive team and their expertise fosters a smooth collaboration.

Chris Cox

CTO, MyMelo

Louisville, Kentucky

How we help MyMelo Company

We provided staff augmentation resources for a development project. The team contributed engineers to follow an established roadmap to perform updates and add features.

Technologies used

Syberry delivered a solid website that has become a database of close to 40 organizations. The team worked quickly and efficiently to get the website up and running, and they continue to invest their time into the project. Additionally, they have been a communicative partner.

David Snyder

Product Director, Covid Resource Network

West Orange, New Jersey

How we help Covid Resource Network Company

The company developed a website that serves as a database where organizations can find and donate to other organizations. Currently, the team is working on enhancing the website and fixing bugs.

Technologies used

When the system is up and running, it will save time for the internal team. Syberry was a patient partner, and they performed well throughout the collaboration.

Joyce Cubio

VP of Operations, Ernie's Mobile Home Transport

Yuba, California

How we help Ernie's Mobile Home Transport Company

The team built an information hub for a mobile home transport and permit service. After discussing the existing system and processes, we delivered a new structure for forms and data.

Technologies used

All deliverables have exceeded expectations and function properly once launched. The Syberry team is skilled in juggling multiple projects, and provide strong expertise in software development. Their dedication to the project has fostered continual success in the engagement.

John Fox

Executive VP, Fox Business Automation Solutions

Lakeland, Florida

How we help Fox Business Automation Solutions Company

Brought on as a third party, we supplied ongoing development services. The team work on multiple projects and deliver according to predetermined design specifications.

Technologies used

Contact us to learn more about how Syberry can help your business achieve its every goal!

0 / 2500

Sign a mutual NDA NDA preview before a conversation.

When to sign an NDA?

A non-disclosure agreement (NDA) is a legal contract between parties, such as the software developer (or a software development firm) and yourself, outlining information to be shared and requiring that information be kept confidential.
Send
Submit loading...

Was this page helpful?