We assist in drafting non-disclosure agreements (NDAs) that protect your company's interests and trade secrets.
Non-disclosure agreement (NDA)
A non-disclosure agreement, also known as an NDA, is a legal document signed between two or more parties to protect confidential information or trade secrets. An NDA is crucial for companies that share or receive sensitive information with partners, employees, subcontractors, or other parties. The NDA specifies which information is considered confidential and governs how this information is used and shared.
The purpose of an NDA is to ensure that confidential information is handled appropriately and accessed only by those authorized to do so. Such agreements are particularly important for companies dealing with sensitive or competitive information, such as technology or product development firms.
NDAs are one of the most important tools for protecting trade secrets, which are part of intellectual property rights. NDAs complement the protection provided by intellectual property rights.
Trade secrets can include technical information, customer lists, marketing strategies, or other valuable information whose disclosure could harm the company. When companies or individuals collaborate, NDAs ensure that information related to intellectual property, such as patent applications, development projects, or creative ideas, remains confidential. This is especially important during negotiations and collaborations where information related to innovation and intellectual property is shared.
If confidential information is shared in only one direction, a confidentiality agreement, which is unilateral, is used. In contrast, an NDA is always bilateral.
Typically, an NDA will cover at least the following aspects:
- Parties: The scope of the agreement is defined between the parties, i.e., the information provider and the recipient.
- Scope of Confidentiality: Defines what information is considered confidential.
- Purpose: Defines the purpose for which the confidential information may be used. Generally, the confidentiality obligation relates to the development of a specific project, product, or service.
- Duration of Confidentiality: Specifies the period during which the parties are committed to keeping the information secret. The duration of an NDA can range from a few years to even indefinitely, depending on the situation and the needs of the parties.
- Exceptions to Confidentiality: Typically, the NDA includes exceptions, such as situations where confidential information may be disclosed for legal reasons, such as requests from authorities.
- Disclosure of Information: Defines how information can be disclosed between the parties and under what conditions it is permissible.
- Protection of Information: Specifies the measures the parties must take to ensure that confidential information is protected and that the risk of disclosure is minimized.
- Damages and Consequences: Defines the consequences of breaching the agreement, including possible damages, contractual penalties, and legal actions that the parties may take in the event of violations.
- Applicable Law and Dispute Resolution: Specifies which country's laws apply and how potential disputes will be resolved.