First, what exactly is an NDA? An NDA is an agreement between two or more parties that imposes certain restrictions on the disclosure of confidential, protected or secret information. Sometimes only one party (or one number less than all parties) will disclose confidential information; this information is generally referred to as “unilateral NOAs” since confidential information flows in only one direction and the obligation to protect and keep information secret in the other direction. In other words, in a unilateral NOA, confidential information is disclosed in exchange for a promise to keep that information confidential. In order to prevent unauthorized disclosure of information by employees, confidentiality agreements (“NDAs”) may be the most misunderstood category of legal documents. For some, they are boilerplate forms that you can download and use on the Internet without the need for a revision. For others, they are intimidating and overwhelming because of the legal complexity they contain. Some believe that an NDA should be needed before almost all trade discussions take place with anyone. Others believe that NDAs are unworkable (or, at best, not feasible) and are totally opposed to their usefulness. Who`s right? – How are industrial property rights paid in licensing agreements? – What are the pros and cons of participating in a joint venture with another company? – What are the pros and cons of licensing? On the other hand, both parties (or all) sometimes intend to disclose confidential information. In these cases, a “mutual NOA” is appropriate, since all parties agree to disclose (or, at the very least, possibly disclose) confidential information and all parties agree to respect the confidentiality of the information provided by the other party and not to disclose it. In both cases (unilateral or reciprocal NOA), the purpose of such an agreement is to promote the free flow of information, usually in the context of the review of parties assessing or conducting a commercial transaction.
In exchange for the privilege of having access to certain information, the NDA has an obligation not to disclose this information. In some cases, confidential information is collected and processed by company employees. In these situations, it may be advantageous for employees to sign NDAs that prevent them from disclosing information about the company and its customers. In some cases, there may be government or federal laws that already prohibit such disclosures. Trade secrets such as formulas, client lists, algorithms, etc., are largely trade secrets because they are kept secret. Since secrecy is essential to their existence, it is always a good idea to restrict access to them. The problem is that some people need to have access to this information, including staff and sometimes even external contractors or third parties. Your mix of proprietary formulas, made by your manufacturer (on the go or across the country), can only happen if they have your secret recipe. In this situation, it is generally a very good idea for parties with access to information to sign a confidentiality agreement in order to preserve the legal protection afforded under trade secrets. – What are the main contractual agreements for technology transfer? Companies often consider partnering with a particular project or effort, and they must share a large amount of proprietary information to each other to evaluate the agreement and bring the business to fruition. Again, this is a typical situation in which a confidentiality agreement is a good idea not only to ensure that the information remains confidential, but also to define the rules for the use of this information by both companies during the project.