A Non-Disclosure Agreement (“NDA”), also referred to as a confidentiality agreement (“CA”), is a legal contract between at least two parties that specifies certain confidential material, knowledge, or information that parties wish to share for certain purposes, but wish to restrict access to or by third parties.
Before you decide to use a Non-Disclosure Agreement, first you must determine the confidential or trade secret information you need to protect from unauthorized disclosure to others. This can be daunting and complicated, but necessary for every successful business. Ask yourself, what gives you an edge over competitors because it is not generally known to them. In other words, what does your company own and taken steps to protect as confidential which your competition would love to know.
Some examples of Confidential and Trade Secret Information:
* Strategic marketing and sales plans
* Methods of Manufacturing
* Production techniques
* Expansion plans
* Information Technology
*Research & Development, and
* Customer Lists.
Non-Disclosure Agreement Common Scenarios:
- Showing a new product or technology to a licensee
- Receiving services from a company or individual who may have access to sensitive information in the process.
- Discussing your business idea with a potential partner, investor, or distributor.
- Allowing employees access to confidential and proprietary information of your business during the course of their job.
Note: Non-Disclosure Agreements probably don’t make sense for start-ups trying to raise funding from venture capital investors, as most venture capitalists will refuse to sign such agreements.
Disclaimer: Nothing in this article constitutes legal advice. Please consult with an experienced Intellectual Property Attorney before making any legal decisions.