Have you ever watched a show like Shark Tank and thought to yourself, “I thought of that (product/process/etc.) years ago! Why does this guy get to profit from it?” The answer to that may be a patent, but more likely, it’s because of a Non-Disclosure Agreement. You may have come up with that idea years ago, but if you talked about it with friends while out to dinner, there isn’t anything stopping someone else is profiting from it. Unfortunately, a verbal agreement isn’t much help. With a Non-Disclosure Agreement, you could protect a prototype product, intellectual property, and even a new business model.
What It Is
When you and your business have patented information and trade secrets to protect, a Non-Disclosure Agreement is the way to legally do so. This document creates a legally binding contract between you and your employees and/or business partners in which you agree to keep private certain information. This ensures that anyone you discuss your material with, as long as they are part of the agreement, will face legal repercussions if they take that information elsewhere. We at Coepio Legal have outlined the basics of a Non-Disclosure Agreement to help you decide whether this contract may help you.
Parts of an NDA
A Non-Disclosure Agreement lists out the specifics for your business in the following four categories:
- Definitions – This section sets out the definition and specifics included in the confidential material, knowledge, or other information protected by the agreement
- Exclusions – This section delineates what information/content is not part of the agreement and is, therefore, permissible to share and what must be kept exclusive to those within the agreement (usually employees and contractors of the company). Exclusions often mark what is considered common knowledge versus what is protected by the agreement.
- Obligations – This section breaks down what may and may not be done with the information provided in the definitions. This section makes clear with whom and when one is allowed to share the materials or information being protected.
- Time – This section of the contract makes explicit the duration all parties must keep the given material confidential. For example, the time stated in an NDA often includes how much time after an employee leaves the company they must wait until they are permitted to work for a competing business.
When Do I Need One?
A Non-Disclosure Agreement can be, and should be, customized for your specific product or information. When you make a shift from discussing “what” and move to discussing “how” at your business, you may want to look into a Non-Disclosure Agreement. Non-Disclosure Agreements can cover anything from a business model you’re seeking funding for to a product that has not yet been patented or results from laboratory experiments. The NDA protects your information, process, or product so it cannot legally be copied or profited from without your permission.
If you need a Non-Disclosure Agreement to protect your intellectual property, you will need to work with a contract lawyer to draw up a binding legal agreement. Call Coepio Legal to get started on drafting a Non-Disclosure Agreement for your San Francisco business today!