Fundamentals of IPIntellectual Asset Management

Managing Confidential Information

If you are an in-house counsel or in-house intellectual property attorney for a technology company, chances are you are constantly drafting and reviewing Non-Disclosure Agreements (NDA’s). These agreements generally rear their ugly heads whenever two or more companies decide to get together to discuss the potential for merging their technologies to develop new products.

Often, NDA’s are crammed with provisions that are never fully explained in detail to the persons who will be engaged in the discussions. This lack of understanding regarding the boundries set forth in the NDA’s can lead to unintended disclosures of confidential information not covered under the agreement. To protect against unintential disclosures of confidential information, it is important to draft NDA’s that cast an expanded web of protection. Here are a few tips to broaden the scope of your NDA’s.

  1. Try to keep the description of the subject(s) or topic(s) to be discussed as broad as can be. If at all possible, merely state that the parties are entering into the agreement for the purposes of evaluating their respective technologies.
  2. Include a broad definition of “confidential information” and provide as many examples of information that could be considered confidential.
  3. Do not include a provision that says you will put all orally disclosed confidential information in writing within a specific period of time (say 30 days) if you do not intend to actually do it. Alternatively, I suggest providing a simple form that should be used at the discussion table where the parties can list the information disclosed that they consider confidential. At the end of the discussion, all parties should retain a copy of the form and it should become part of the written NDA.
  4. Whenever the possibility arises where proprietary information that has not been publicly disclosed will come up when the parties hold their confidential communications, the NDA should indicate that the discussions do not form the basis for assignment or ownership of intellectual property rights and that all rights will remain that of the disclosing party.
  5. The NDA should also include a provision that prohibits the reverse engineering of products.6. Depending on how quickly technology develops in your particular industry, you may want to contract for a termination period that exceeds 3-5 years, and preferably never.

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