Non-Disclosure / Confidentiality Agreements for your business and its Intellectual Property

Often business owners or company directors ignore the importance and significance of a properly constructed Non-disclosure or Confidentiality Agreement, and engage in discussions with outside parties and potential or prospective business partners communicating sensitive data and background Intellectual Property, without contractually protecting their unique know how or ideas.

Any prudent business owner or company director before communicating any aspect of the ‘know how’ or ‘background Intellectual Property’ with regard to its product or service, should first consider entering into a properly constructed and tailored Non-disclosure Agreement or Confidentiality Agreement before commencing discussions.

In relation to this and some of the issues that a business or company director should be aware of are the following:

Central to a Non-disclosure or Confidentiality Agreement

Is the person who becomes aware of this new information is prohibited from any use of that information which is unauthorised by the agreement or disclosure of particular information.  The Agreement will set out the types of information which must remain confidential and not be disclosed to any other party outside that of the parties to the agreement.

It is important that the  agreement defines or specifically sets out the confidential information which is to be protected such as a background Intellectual Property and Know-how which a particular company has acquired in developing its product or service, and other types or brands of unique information such as designs, plans, specifications, and the makeup of a product or device.

The Non-Disclosure Agreement or Confidentiality Agreement should be tailored to each individual exchange, and should set out the reasons as to why the agreement is entered into.

For example:

a) In order to enter into a possible agreement for manufacture, and/or supply.

b) A contract of employment by a certain person to carry out certain duties within your company or  business, or a contract for  services.

c) Or a possible purchase or buyout of your company or business.  It is important that the Non-disclosure Agreement or Confidentiality Agreement also applies to a particular company or persons businesses associates, connected persons, subsidiary companies or affiliate companies.

d) There should be a specific  or defined term to the entire agreement, in which case if the meeting does not happen and passing over of information does not occur the agreement will cease to have effect within a certain time period.

e) The remedies available in the event of a breach of the Non-Disclosure or Confidentiality Agreement.  The Non-Disclosure or Confidentiality Agreement should provide for injunctive relief in the event of a breach, and can include that the offending party be liable for the payment of monetary damages to the party who has suffered as a result of the breach.

Alternative Dispute Resolution.  It is always a prudent step to have a provision in any agreement that in the event that the relationship breaks  down and/or a dispute arises that the parties will enter into some form of alternative dispute resolution outside that of simply initiating court proceedings, and that an intermediary by means of mediator or arbitrator be appointed to assist in resolving the dispute.

Standard provisions. There are  always a number of standard provisions in any Non-disclosure Agreement or Confidentiality Agreement which inevitably has to be tailored to the needs of the requirements of the parties involved.

For further assistance on any of the issues in respect of the above material on non-disclosure agreements or confidentiality agreements please feel free to contact us at