Non-disclosure agreement
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A non-disclosure agreement (NDA), also called a confidential disclosure agreement (CDA), confidentiality agreement or secrecy agreement, is a legal contract between at least two parties which outlines confidentiality materials the parties wish to share with one another for certain purposes, but wish to restrict from generalized use. In other words, it is a contract through which the parties agree not to disclose information covered by the agreement. An NDA creates a confidential relationship between the parties to protect any type of trade secret. As such, an NDA can protect non-public business information.
NDAs are commonly signed when two companies or individuals are considering doing business together and need to understand the processes used in one another's businesses solely for the purpose of evaluating the potential business relationship. NDAs can be "mutual", meaning both parties are restricted in their use of the materials provided, or they can only restrict a single party.
It is also possible for an employee to sign an NDA or NDA-like agreement with a company at the time of hiring, in fact some employment agreements will include a clause restricting "confidential information" in general.
Content
Some common issues handled within an NDA include:
- outlining the parties to the agreement;
- the definition of what is confidential, i.e. the information to be held confidential. Modern NDAs will typically include a laundry-list of types of items which are covered, including unpublished patent applications, know-how, schema, financial information, verbal representations, business strategies, etc;
- the exclusions from what must be kept confidential. Typically, the restrictions on use of the confidential data will be invalid if
- * the recipient had prior knowledge of the materials;
- * the recipient gained subsequent knowledge of the materials from another source;
- * the materials are generally available to the public;
- * the materials were obtained illegally; or
- * the materials are subject to a subpoena. In any case, a subpoena would more likely than not override a contract of any sort;
- provisions restricting the transfer of data in violation of national security;
- the term (in years) of the confidentiality, i.e. the time period of confidentiality;
- the term (in years) the agreement is binding;
- permission to obtain ex-parte injunctive relief
- the obligations of the recipient regarding the confidential information; and
- types of permissible disclosure - such as those required by law or court order.
See also
- Business broker
- Form SF-312 classified information NDA
- Invention Secrecy Act (United States, 1951)
External links
- [Confidentiality and Confidential Disclosure Agreements (CDA) booklet] edited by the United Kingdom Patent Office (300 Kb pdf file)
- [Confidentiality Agreements] in IPR Helpdesk, a web site sponsored by the European Commission
- ["Confidentiality Agreements"] - Piasetzki & Nenniger LLP, (2005)
- [Sample Non Disclosure Agreement]
- [Understanding Confidentiality Agreements] by David V. Radack, Journal JOM,46 (5) (1994), p. 68.
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