Non-disclosure agreement

From Wikipedia, the free encyclopedia

 This article or section is missing citations or needs footnotes.
Using inline citations helps guard against copyright violations and factual inaccuracies. (July 2007)

A non-disclosure agreement (NDA) (often known outside of the United States as a confidentiality agreement; occasionally called a confidential disclosure agreement or CDA, or secrecy agreement), is a legal contract between at least two parties that outlines confidential materials or knowledge 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 and need to understand the processes used in each others business 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. Likewise, NDAs are used in the IT field and given directly prior to taking a certification exam.

In rare cases, the contract may state that the existence of the NDA itself cannot be disclosed. [1]

Contents

[edit] 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 Modern NDAs will typically include a laundry-list of types of items which are covered, including unpublished patent applications, know-how, schema, financial information, verbal representations, business strategies, etc;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; 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, typically including some version of obligations:
    • to use the information only for enumerated purposes;
    • to disclose it only to persons with a need to know the information for those purposes;
    • to use all the efforts (but not less than reasonable efforts) to keep the information secure that the recipient uses to keep its own similar information secure; and
    • to ensure that anyone to whom the information is disclosed further abides by obligations restricting use, restricting disclosure, and ensuring security at least as protective as the agreement; and
  • types of permissible disclosure - such as those required by law or court order.

[edit] References

  1. ^ Confidentiality Agreements. IPR Helpdesk, section 13. Retrieved on 2007-12-11.

[edit] See also

[edit] External links