Urban Legend of Silicon Valley
I am not sure that the following story is true. It may just be a Silicon Valley legend. True or not, the economics of the legend make sense to me.
As the story goes, Android founder Andy Rubin met Larry Page at a conference in 2005. Andy convinced Larry that he had a problem. Google was developing mobile applications for a fragmented landscape of mobile devices and operating systems. In the pre-iPhone world, Google’s developers were developing and maintaining applications for a kaleidoscope of mobile operating systems: Windows Mobile, Windows CE, Symbian, Palm, Blackberry, to name a few. To make matters worse, some versions of Symbian, for example, were not even compatible across versions.
Andy convinced Larry that the solution was simple. It would be less costly to develop an open source mobile operating system and give it away than it would to develop and maintain multiple versions of each Google application for a smorgasbord of various, incompatible operating systems. And so, Google acquired Andy’s fledgling company and a Silicon Valley legend was born.
The Really Big Problem
As the General Counsel to a high-growth Silicon Valley company, I have the same problem as Larry Page. Well, my problem is actually much, much worse. Right now, my client has hundreds (no exaggeration) of in-term NDAs. I don’t have to maintain NDAs for a few dozen “operating systems”, I have hundreds. It’s hard to know just what rights and obligations our company has when each of these contracts are different. Not just different; but each NDA is different in a way that creates no recognizable patterns which could be used to manage the complexity.
This problem is getting worse for me, not better. Every week, I have the problem of having to review, negotiate, and conclude dozens more NDAs which are completely different.
NDAs as Operating Systems (OS)
To address my problem, I decided to take a page out of Larry’s book and treat NDAs as code.
Last fall, Bitmovin undertook a project with the Startup Legal Garage at UC Hastings College of the Law with the aim to create an NDA for routine commercial transactions that could be widely adopted and release the NDA as open source with an extremely permissive license. The “Universal NDA” was distilled from the text of hundreds of NDAs to determine the most salient and common clauses and then interviewed nearly two dozen general counsels of tech companies, ranging from small startups to multinational corporations in the Bay Area.
What we did not set out to do was build the perfect NDA. Several years ago, I set out with some colleagues to draft a perfect NDA. The perfect quickly became the mortal enemy of the good, and worse, none of us could agree what the perfect standard would be. So, instead of creating something which would be all things to all people, on the second time around we sought to create a document which would be most things to most people. It was not one NDA, but rather a collection of contractual clauses each one subject to the open source process and refined over time by thousands of eyes reviewing them. From this collection of clauses, drafters could assemble a contract based on a constellation of standard clauses to suit their needs in a particular transaction or type of transactions.
The Big Picture
Android has been successful beyond its originators’ wildest expectations. So here I am trying to convince you that rather than having your own standard NDA, it would be much more efficient to have a standard NDA.
Since we have open sourced the NDA, we hope that it will take on the best characteristics of this kind of software. It’s transparent, peer-reviewed, standardized yet customizable, and will evolve and adapt to meet needs unforeseen by its original developers.
With flexible, modular components, I can build dozens, if not hundreds of different permutations of the NDA to fit any business need or transaction-specific requirements in an automated, just-in-time fashion. But since all these NDAs are crafted from the same core codebase, they follow predictable lines. More importantly, the data representing each party’s rights and obligations is structured. So, the data can be organized, queried, and used to manage the company’s operations.
And, someday, just maybe, you might be able to ask, “Hey, Siri, how many in-term NDAs do I have where the duty of confidentiality extends beyond the term of the agreement?” But, only if that’s your preferred phone of choice.
Ironclad is the #1 contract lifecycle management platform for innovative companies. L’Oréal, Staples, Mastercard, and other leading innovators use Ironclad to collaborate and negotiate on contracts, accelerate contracting while maintaining compliance, and turn contracts into critical carriers of operational business intelligence. It’s the only platform flexible enough to handle every type of contract workflow, whether a sales agreement, an HR agreement or a complex NDA. The company was named one of the 20 Rising Stars on the Forbes 2019 Cloud 100 list, and is backed by leading investors like Accel, Y Combinator, Sequoia, and BOND. For more information, visit www.ironcladapp.com or follow us on LinkedIn and Twitter.
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