It is sometimes necessary to communicate one s invention or confidential information to potential partners or investors before filing a patent application. In this case, it is possible to prevent the secret from being divulged by having the recipients of the information sign a non-disclosure agreement.
This type of agreement is especially appropriate in the initial development phases of an invention, before an application is filed, or for secrets intended to remain indefinitely confidential, for example an internal manufacturing process.
For certain confidential details, patent protection is not possible or not justified, for example when the information concerns know-how, a database, a list of addresses or business statistics. In this case, a non-disclosure agreement often enables an adequate protection to be secured simply and without formalities.
Unlike a patent, the non-disclosure agreement does not grant any monopoly but allows the recipient of the confidential information to be sued in case of abusive divulging and to demand compensation for incurred losses. The amount of the compensation, decided by the judge, can be difficult to prove in case of breach of the agreement.
The non-disclosure agreement is binding only upon the signing parties. It cannot be used against third parties who might have obtained the secret licitly, for example through an independent invention, or by analysing an already available product (reverse-engineering). Consequently, after divulging of the secret, the non-disclosure agreement affords no further protection.
When drafting a non-disclosure agreement (NDA), it is not useful to fully describe the invention or secret in question. However, it is advantageous to briefly and clearly identify the confidential information and to distinguish it from the prior art in the public domain. This can be achieved for example by specifying clearly the place and date of the meeting during which the secret was communicated or by suitably marking the documents.
When an industrial secret is transmitted, it may also be necessary to take into consideration other aspects, for example the ownership of patents that might follow therefrom or the duration of the agreement, and to include in the agreement specific clauses and provisions. P&TS can advise you for drafting a non-disclosure agreement tailored to your needs.
The downloadable NDA specimen
illustrates the structure of a typical non-disclosure agreement. It is given here by way of example only and P&TS cannot accept any liability for the consequences of its use in a real situation.