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Non-disclosure agreements

Whether you have an idea for a new product or service, or valuable information (such as a client list or growth strategy) related to your existing business, it's vital that you maintain the confidentiality of any intellectual property or trade secrets when talking to others using a relevant non-disclosure agreement.
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A non-disclosure agreement (also referred to as a confidentiality agreement or NDA) is a legally binding agreement designed to protect valuable or sensitive business information from being disclosed to third parties during discussions with potential collaborators, investors or employees. Amongst other things, it should define the nature of information considered confidential, how it’s expected to be protected, who is allowed to receive it, how the agreement can be terminated, remedies in case of a breach and disclosures permitted by law. The NDA should be signed by the relevant parties prior to any serious discussions taking place.

An NDA will often be used when two businesses are considering collaboration opportunities, to ensure that any intellectual property (IP) or trade secrets discussed during the preliminary negotiation stages will not be misappropriated or shared with others. Confidentiality agreements may also be used by inventors when talking to potential investors or employers carrying out interviews for senior-level appointments. It’s particularly important for IP based businesses, such as software designers or e-commerce start-ups, to protect themselves with an NDA when talking to potential:

  • investors

  • collaborators

  • manufacturers

  • suppliers

  • licencees

  • business coaches

  • marketing agencies

If you are considering applying for a patent, you should protect your ideas using an appropriate NDA when discussing them with anyone you do not completely trust - as you can end up losing out if they beat you to the patent application.

Standard two-way non disclosure agreement - this covers information disclosed by either party involved in discussions. Businesses considering collaboration or exploring a possible merger will want to implement a two-way NDA before revealing any sensitive information.

One-way confidentiality agreement - this is used where valuable information or intellectual property is only being disclosed by one party. It’s suitable for an inventor who wishes to hold discussions with an investor or an employer recruiting for a senior-level position.

Confidentiality letter - this provides a straightforward method of protecting confidential business information, importing the value of confidential information on the other party without the formality of a one-way or two-way non-disclosure agreement.

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