“Beneath this mask, there is more than flesh. Beneath this mask, there is an idea, Mr. Creedy, and ideas are bulletproof” -V (from the film V for Vendetta)
Ideas are something that startups count on. Ideas are revolutionary. They are bulletproof, but they can be stolen. Oh! What a heartbreak that would be. So in order to keep one’s ideas in closed wraps, a Non-Disclosure Agreement finds its use.
What is a Non-Disclosure agreement?
Non-Disclosure Agreements or NDAs are important legal frameworks which are used to protect sensitive and confidential information from being made available by the recipient of that information.
A Non-Disclosure Agreement is entered by two or more parties who are required to keep the information being provided confidential and undisclosed. In a Non-Disclosure Agreement, the parties define the confidential information, the period of non-disclosure, the terms of confidentiality and the damage by disclosure.
Simply having a confidentiality agreement in place is a clear indication to the other party that you trust them with something important and that if they violate your trust, there will be significant legal consequences. Every Non-Disclosure Agreement varies from party to party, case to case and so each agreement is tailored to suit the needs of the moment.
NDAs are also an essential part of negotiations for business mergers and corporate takeovers, therefore important to consult a suitably skilled attorney that understands the nature of confidential information, to ensure that important business assets and information are adequately protected.
Why is an NDA important?
Non Disclosure confidentiality agreements typically serve three key functions:
- NDAs protect sensitive information.
By signing an NDA, participants promise to not divulge or release information shared with them by the other people involved. If the information is leaked, the injured person can claim breach of contract.
- In the case of a new product or concept development, a confidentiality agreement can help the inventor keep patent rights.
In many cases, public disclosure of a new invention can void patent rights. A properly drafted NDA can help the original creator hold onto the rights to a product or idea.
- Confidentiality agreements and NDAs expressly outline what information is private and what’s fair game.
In many cases, the agreement serves as a document that classifies exclusive and confidential information.
Types of Non-Disclosure Agreements
Unilateral Non-Disclosure Agreements
Unilateral Non-Disclosure Agreements are one-sided and require one party to agree to the other parties terms (usually employee). In this case, the party agrees not to reveal confidential information he or she learns on the job. However, most of the Non-Disclosure Agreements fall into this category.
Bilateral Non-Disclosure Agreements
Agreements of this sort are intended to protect a business’s trade secrets or to protect the copyright for information created through an employee’s research. Researchers in the private sector and professors at research universities are sometimes required to sign NDAs that gives them the rights to any research they conduct with the business or university that supports them.
Bilateral Non-Disclosure Agreements or mutual NDAs are typically executed between two businesses taking part in a joint venture. These types of NDAs usually involves the exchange of proprietary information between the agreeing parties. The confidentiality would be maintained by both the parties taking part in each other’s information being exchanged to one another.
How were companies using NDAs in the past?
In the past, an NDA would involve prior briefing to both the parties and then the parties would sign the NDA only after accepting the terms and conditions. Additionally, this NDA paperwork had to be kept somewhere safe and secure and could be retrieved when required. Imagine the pile of paperwork that was shoved in the backroom just because of a load of keeping information secure.
Digital Non-Disclosure Agreement – The Future
To stay ahead of the game, a lot of companies use a Visitor Management System to digitally sign an NDA. The best time to ask a visitor to sign in an NDA would probably be the time the visitor is at the reception. What happens is that the VMS asks the visitor to fill up all kind of related and required information for the visit and then presents a digital NDA to sign.
Digitally signing an NDA saves a lot of time and paper. A quick sign in an NDA wouldn’t take a lot of time, and by the way, they were already filling out their information regarding the visit.