Non-Disclosure Agreements – “It’s Just an NDA!”

In All, Technology by lowndestech

By: Jim O’Brien

Non-Disclosure Agreements or Confidentiality Agreements have become so common in the technology space that almost no communications are undertaken without one being in place. Given the numerosity of these agreements, many have become so used to these documents that the substance of the agreements are generally presumed to be the same and its importance is discounted because “It’s just an NDA!”.  This approach can lead to significant surprises and potentially larger business and legal issues.

An example of this risk is demonstrated by a clause found in a recent draft NDA:

“Notwithstanding anything to the contrary in this Agreement, Recipient shall have the right, at any time during or after the term of this Agreement, to disclose and otherwise exploit ideas, concepts, know-how and techniques contained in or derived from Discloser’s Proprietary Information that are retained solely in, and Recipient first reduces to tangible form solely from, the unaided memories of Recipient’s Representatives who have had access to Discloser’s Proprietary Information under this Agreement.”

Imagine the dismay of realizing that a party that you disclosed proprietary information can simply jot down their recollections and thereafter disclose or use that recalled information for their own purposes.  While not all NDAs will have such contractual landmines, best practices require a review of all NDAs so as to confirm that company proprietary information is properly defined and protected from unauthorized use.