Nondisclosure Agreement Tips

Nondisclosure-AgreementHere are some useful nondisclosure (or confidentiality) agreement tips. They are based on 20 years of business experience with these types of agreements.

 Defining What Is Confidential

The criteria concerning what is required to make information confidential depends on whether the information is presented in written or oral form.

 Written Information

A very common provision is that written information has to be marked “confidential”. This seems straightforward, but two landmines are built into the language.

  •  If someone forgets to mark an important document that is exchanged, where are you?
  • Attorneys have told me that a problem arises when you mark too many things “confidential” when they are not. (I believe the test is if you keep them as confidential in other circumstances.) If you put up a chart showing the names and locations of available meeting rooms, but it is in a presentation, every page of which is marked “Confidential”, protection for the information that actually is confidential may be compromised.

So, do not fail to mark items that are confidential and do not mark things that are not.

 Oral Information

When presented orally, two common requirement are (i) an oral statement must be made that the information is confidential when it is presented and/or (ii) the party receiving proprietary information must receive written verification that material was confidential within “x” days of its delivery.

How often does a representative at a meeting remember to write down everything discussed that was confidential and pass it on to the other side? My guess is that the percentage is very low.

 One Possible Solution

I have begun seeing many nondisclosure agreements providing that anything that would reasonably be considered to be confidential will be treated as such.

Nondisclosure agreements are a major element for protecting your intellectual property. They should be carefully crafted to provide protection without being so cumbersome that they will not serve.