Any non-public information of a disclosing party which is actively maintained (i.e. protected) as proprietary or confidential;
Proprietary / Confidential information can include technical and scientific information, research data, invention disclosures, trade secrets, source code, electronic files, biological materials, patent disclosures, patent applications, draft publications, research plans, business plans, financial information, etc., etc., etc…;
Provided in tangible form with conspicuous markings stating the information is confidential /proprietary to the disclosing party.
Proprietary Information is not:
Information found in the public domain as of the effective date of the NDA or comes into the public domain during the term of the agreement through no fault of a receiving party (there are exceptions);
Was known to a receiving party prior to the effective date and not acquired (directly or indirectly) from a disclosing party or from a third party under an obligation of confidentiality;
Was independently developed by receiving party without substantive knowledge of, or assistance from, the proprietary information;
Is disclosed by rule of law.
Identify the parties to the agreement;
Identify the points of contact for the receipt and the responsibility for the protection of proprietary information;
Identify the points of contract for administrative or legal notices;
Provide a stated reason to share confidential information (i.e. the purpose of the agreement);
Contain a brief, high level, summary of the proprietary information each party will bring to the discussion held under the agreement.
NDAs should have terms that:
Require information to be in tangible form, identified as proprietary /confidential and conspicuously marked proprietary;
Require proprietary information shared verbally be identified as proprietary at the time of disclosure, summarized in writing as soon as possible thereafter with the summary shared with the parties from the discussion;
Specify a specific term where proprietary information will be shared (usually 1 year);
Specify a specific term during which the parties have a duty to protect the Proprietary information shared (usually 3 years from disclosure or the effective date);
Define the standards of care or protection of proprietary information.
NDAs should not:
Leave the definition of proprietary information open ended – must be in tangible form and properly marked (also prefer to state a purpose and the parameters of information disclosure);
Leave the term of the agreement and the duty to protect proprietary information open ended;
Give license rights or right of use for the proprietary information to the receiving party outside the scope of the purpose of the NDA;
Determine ownership rights of information disclosed or created during the term of the nondisclosure agreement;
Discuss publication of the faculty’s research;
Warrant / guarantee the information provided;
NDA Take Away
It is imperative that the Managers in the field of sales/ marketing/business development be aware of what is allowed under the NDA – this may take a bit of education on behalf of the Company.
Always a good idea to provide a fully executed copy of the NDA to such executives before entering into initial discussion.