I just finished uploading some minor revisions to the PRECUT Nondisclosure Agreement. It was a little bit of a pain, because I had to update four different Microsoft Word documents (three of which are posted only as PDFs) to make sure they stayed in sync:

• The PRECUT NDA itself;
• The Curator’s Notes, which contains the commentary as well as additional clauses for possible use in a custom addendum;
• The Confidentiality Provisions addendum, which is designed to be attached to another agreement; and
• The Word document containing just the clauses in the NDA and Curator’s Notes, for easy editing into a custom stand-alone agreement.

I’ve tried various ways of maintaining a single “master” version of each clause and its commentary, but nothing worked out too well. If I were really technical, I could probably hack together some kind of database that output to RTF and PDF files; maybe someday.

See also: (list is automatically generated)

• PRECUT NDA: A free, balanced, multi-purpose, nondisclosure agreement
• PRECUT confidentiality provisions addendum is up
• Confidentiality agreement (NDA) short-form starter draft and annotated long form

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I just posted a one-page (front-and-back) PDF addendum with “down the middle” confidentiality provisions, excerpted from the Curator’s Notes e-book. The addendum can be attached to and incorporated by reference in another contract form.

See also: (list is automatically generated)

• PRECUT NDA: A free, balanced, multi-purpose, nondisclosure agreement
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“If the other side doesn’t know what to ask for, it’s not my job to educate them.” That’s one reason a contract drafter might not want to use a PRECUT baseline contract form: the other side would be led to the Curator’s Notes for that form, which would give them a good idea of what to ask for in negotiations.

Sure, it’s hard to give up the advantage of superior knowledge. But:

1. Your notion that you’re the one with superior knowledge might be wishful thinking: The other side could bring in an expert who knows exactly what changes to demand. You might be better off setting the tone with a demonstrably-reasonable contract, and then standing on principle to reject unreasonable change requests.
2. Suppose that the other side’s expertise is indeed lacking. If they’re “good corporate citizens,” chances are you’ll get them to signature faster — and you’ll be laying a foundation for a trusting re­la­tion­ship — if the draft you’re proposing seems fair and balanced.
3. One danger of a clueless contract reviewer is this: The reviewer might make un­rea­son­able demands, but being clueless, s/he won’t know — and can’t be convinced — of their unreasonableness. That could drive the negotiation right into the ditch.

See also: (list is automatically generated)

• Leading off with a “killer” contract form document might be a bad idea
• PRECUT NDA: A free, balanced, multi-purpose, nondisclosure agreement
• How to convince a big customer to use your contract form – and get your sales people to support you in it

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Some say it’s best to start a contract negotiation by sending the other side your “hardball” or “killer” contract form that’s extremely biased toward your side. By doing so (the theory goes), you set the other side’s expectations, and increase the odds that you’ll eventually get more of what you want. Doing so also gives you a batch of potential concessions that you can use for horse-trading.

Certainly there are transactions in which it makes at least some sense to do this. And of course it’s always fun to play “the art of the deal”; it feels just plain good to come out on top when negotiating the legal fine points.

But don’t underestimate the price you’ll pay for these putative benefits:

• in business-staff time, because it’s not just lawyers who have to spend time negotiating legal T&Cs;
• in legal expense (which includes in-house counsel, too);
• in opportunity cost, not just for vendors as the ‘shot clock’ runs down at the end of the fiscal quarter, but also for buyers who likely have other things they could be doing as well (especially in this day and age of increased workloads on those who still have jobs).

So when negotiating a deal, you might want to ask yourself whether “hardball” negotiation of legal T&Cs is really what you want to be spending your time doing.

It might make sense instead to lead off with a balanced contract form that represents a fair, reasonable way of doing business.

That way, perhaps the parties could “just sign it” and get on with their business.

(Adapted from the preface of the Curator’s Notes to the PRECUT Nondisclosure Agreement.)

See also: (list is automatically generated)

• Three reasons to educate the other side’s negotiators what to ask for in the contract
• How to kill a big-company deal in the cradle: Refuse to use the other side’s contract form
• Cramming down a killer contract might give you a wounded tiger to deal with later on

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[UPDATED 2010-09-03]

PRECUT ™ NDA Downloads

• NDA form (fillable PDF)
• Curator’s Notes (PDF)
• Word document containing all PRECUT NDA clauses, plus numerous other NDA provisions that can be copied to a custom addendum (RTF)
• Confidentiality provisions adddendum — just the confidentiality provisions from the PRECUT NDA, for possible use with other agreements

Commentary

The PRECUT ™ Nondisclosure Agreement is a free, balanced, multi-purpose, customizable NDA, in the form of a fill-in PDF.

While of course no contract form can be one-size-fits-all, for many purposes the PRECUT NDA should be pretty much ready to sign as-is.

The Curator’s Notes contain many additional clauses and extensive commentary.

Ask your lawyer whether you could save time and money by using the PRECUT NDA as the foundation for your next nondisclosure agreement.

This is the first of what I hope will be a series of ready-to-sign contract forms available under a Creative Commons license.

Comments and other feedback are welcome, especially suggestions for other types of contract that you’d like to see developed.

See also: (list is automatically generated)

• PRECUT free, balanced, curated technology contracts
• PRECUT confidentiality provisions addendum is up
• Confidentiality agreement (NDA) short-form starter draft and annotated long form

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I’ve posted a PDF of a six-slide deck I did for a recent client presentation. It explains the approach I use to do inventor interviews for patent applications. In a nutshell, the inventor and I camp out in a conference room with my laptop (or we work remotely over a screen-sharing connection). We collaboratively draft actual claims and explanatory footnotes.

This approach has proved quite popular: Inventors like being able to provide real-time feedback. That way, they don’t later have to correct a lawyer “term paper” that’s likely full of gaps and misunderstandings.

In a pinch, we could complete and file the patent application in one day if necessary. Employers like that.

I also posted a longer deck. It goes into considerably more detail about the approach.

And here’s a paper I wrote some years ago on the same subject. It was published in the Journal of the Patent and Trademark Office Society.

See also: (list is automatically generated)

• A patent owner’s lawyer waves the flag for the jury – or is it the bloody shirt?
• How patent claims work: A variety of different AND statements, all OR’d together

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Hacker News links to a funny story about a Microsoft conference speaker who found out, too late, just who the audience member was that he was debating. See also the HN comments.

The story reminded me of an analogous experience I had some years ago. A client asked me to help negotiate a software license agreement drafted by the other side’s lawyer. I saw that the other lawyer had selectively copied clauses from a set of model software license pro­vi­sions developed by an ABA committee. On the negotiation conference call, I mentioned that the other lawyer had left out certain language that had been included in the model provisions so that they would be a reasonable compromise. My client was amused at the other lawyer’s discomfort when he connected the dots and realized I had been the chairman of the model-provisions drafting committee.

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I’m intrigued by the so-called “litigation prenup,” a.k.a. the Economical Litigation Agreement, or “ELA,” that’s being proposed by Boston litigator and former judge Daniel Winslow, along with the International Institute for Conflict Prevention & Resolution (CPR Institute).

Sure, there are the inevitable nay-sayers who claim that judges won’t like it (I think they’re wrong about that). And some of the specific ELA terms and conditions might need some fine-tuning.

But on the whole, Mr. Winslow is to be applauded for proposing what I think could be a huge money-saver.

Even so, however, I don’t think I’d counsel a client to make an irrevocable commitment to the ELA just yet. It’s too new a concept. The legal community needs to get some experience with it.

So I would change the proposed contract clause to include a narrow window of opportunity for either party to opt out, thusly:

XX. Economical Litigation Agreement: (a) Except as otherwise provided below, any dispute arising out of or relating to this Agreement or any transaction or relationship arising from it, including for example the breach, termination or validity of this Agreement, whether based on action in contract or tort, shall be finally resolved by civil litigation in accordance with the International Institute for Conflict Prevention & Resolution Economical Litigation Agreement (2010 edition) (the “ELA”), by a judge sitting without a jury.

(b) In jurisdictions where advance waiver of jury is prohibited as a matter of law, or where all parties to this Agreement subsequently agree in writing, such dispute shall be decided by a jury.

(c) Either party may opt out of the ELA by giving written notice to the other within ten business days after service of the summons and complaint or their equivalent.

(Italics indicate my edits; extra paragraphing added for easier reading.)

See also: (list is automatically generated)

• Contract clauses specifying “good faith” can result in greater discovery expenses in litigation

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Reader Matt Richards of Constant Wave, a vendor of signal-analysis software, reports on an area where standardized contracts could do some good:

I was at a spectrum sharing conference this week, and it seems like a target-rich environment for lawyers in general. However, someone commented that a lot of progress could be made by businesses making agreements between themselves with appropriate contracts, and thereby not waiting for the government to develop more regulations. That made me immediately think of you.

The problem is that most spectrum is unused, and yet there is a huge demand for spectrum. Typically, the licensees are afraid to sublicense their spectrum when they aren’t using it because they think it may be illegal and they are concerned about what recourse they would have if the other party interfered with their use. It was noted that contracts already address these sorts of issues every day in other areas.

One example is a school district that broadcasts during school days. The spectrum is unused otherwise, the district could raise funds by leasing it (new ongoing revenue stream), and a business that would otherwise be shut out would be able to provide a service to customers. Seems like a win-win-win, but things are largely frozen, and a lack of trust was often cited as the culprit.

One presenter was the Peter Stanforth, the CTO and Founder of Spectrum Bridge, who is trying to create a secondary market for unused spectrum.

Feel free to pass this along to anyone who might be interested.

And, as always, thanks very much for your blog.

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My former law partner David Healey has posted an excellent list of clauses that a licensee should press for in negotiating a patent license agreement, especially when taking the license to settle an infringement lawsuit. (Dave knows whereof he speaks; he has pulled off some stunning negotiations for licensees.)

See also: (list is automatically generated)

• Patent rocket docket in E.D. Texas – more transfer motions expected after appellate reversals of denials
• Quicken, TurboTax maker signs $120 million patent license agreement with leading ‘non-practicing entity’
• Monday-morning quarterbacking: How eBay might have negotiated an irrevocable license for Skype’s under-the-hood technology, while leaving ownership with the founders

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