Using Confidentiality Agreement to Protect Your Business
Alva Pao-Pei Alfonso
A confidentiality agreement (also called nondisclosure agreement or NDA) is an agreement or contract wherein parties involve promise to keep the confidentiality of an information being disclosed during employment or any other type of business transaction. Usually, confidentiality agreements are very widespread in fields involving technology, particularly for internet companies.
In the event that another party discloses and/or uses the secret that you shared in a meeting that is bound by a confidentiality agreement, that party is liable for damages done to you and your business. You can take them to court and sue them for violating the confidentiality agreement.
Why make a confidentiality agreement?
This sort of agreement is useful if you want to create a confidential relationship while sharing trade secrets. This is particularly useful also to employers who have employees that handle sensitive customer information (such as contact details). Having the employees sign a confidentiality agreement as part of their employment contract will assure that they will not gather important data while working for you and then sell the information to a competitor or benefit from those information themselves after their employment with you has been terminated.
What is in a confidentiality agreement?
Ideally, a confidentiality agreement has five key elements:
" The definition of confidential information and what its scope will be in a persons job, working environment or business meeting
" Exclusions or what are not included from confidential information
" The obligations of the receiving party
" How long this confidentiality agreement lasts
" Other miscellaneous provisions
Read before you sign
It is always good and sensible to read any document before you sign it. It is particularly true for confidentiality agreement, as some nondisclosure agreements waive your rights to any confidentiality instead of protect it.
If you have developed or invented a marketable software, idea, or device, then most probably you will be faced with a dilemma. Marketing your product would require you to present it to people. How would you protect your intellectual property while doing this? There are many ways to protect your ideas and inventions, and one of them is using a confidentiality agreement. It would be best that you have your potential client sign a confidentiality agreement before you pitch your product to them. Most reputable companies would respect that. However, some might not agree to sign a confidentiality agreement. Therefore, you are stuck between the decisions to disclose your ideas, otherwise, risk losing a seemingly good business opportunity.
Consider some things before you share your ideas or invention with other people who would not agree to a nondisclosure agreement. It is best to make your research about the background of the company and see if they have a history of lawsuits relating to similar cases. Remember that in most cases, it is better to lose a business opportunity than to give in to this demand and lose your potential business.
Some of the information that can be protected by confidentiality agreements is:
" Business strategies
" Business methods
" Blueprints
" Product designs
" Production processes
" Formulas
" Recipes
" Computer software
" Physical inventions
" Customer lists
" Other customer data
" Miscellaneous business data
What are the obligations of the receiving party?
The people who have been recipients of confidential information have an obligation to hold the information in confidence and limit the use of that information. They also cannot induce others to breach it.
If you feel that you have been a victim of a breach in confidentiality agreement, it is best to be represented with lawyers that have experience with dealing with such cases. Winning this case may be very crucial to your business, and might spell the difference between the failure and success of your product when you introduce it to the market.
|
