NDA or the highway: protecting secrets during a pitch

There are few things more tantalising than the prospect of a new partner, especially for an ambitious start-up.

And the journey towards closing a potential deal will mean meetings, either virtual or in person, often fostering a sense of trust, ease, even friendship.

But then silence: the start-up is ghosted for a period or rejected outright, and the proposal comes to nothing.

Disappointment is inevitable, but this can swiftly turn to anger if similar ideas explored during meetings are later unveiled in products by the party that rebuffed them.

This tale is one that Jordan Jaffe, partner and trade secrets expert at Wilson Sonsini Goodrich & Rosati, hears often.

“We’re seeing these scenarios in which companies are nearly at the end of negotiations to close a deal and it just falls through at the last hurdle,” he explains.

Spurned vendors

“The bigger company looks at the proposal and for whatever reason decides that the start-up’s offering is not a good fit. But then a year or two later, they release something that is then accused of performing the same function.

“So we see many spurned vendors who argue that they disclosed confidential information on how to create an invention, which the company then stole.”

Such disputes are increasingly played out across all industry sectors. Last month, UK battery maker Nexeon filed its motion for the dismissal of a lawsuit filed by a Seattle-based rival, Group14 Technologies.