Non-disclosure agreements may never have really been simple, but they do seem to have become more complex in recent years. No doubt part of the reason for this is the increasing sophistication of those writing and managing NDAs.
Whatever the cause, the result is a substantial amount of risk for companies and individuals who dismiss NDAs as mere "boilerplate." It is now as crucial as ever that those doing business with others use NDAs and, when using others' forms, read them carefully.
Here are a few challenging positions I have seen in NDAs that I suggest users approach with caution.
1. Assignment of intellectual property ownership. An NDA is designed to simply allow two parties to start talking to one another about a deeper relationship. Yet, in a couple cases, I have actually seen an NDA provide for one party's ownership of everything created over the course of the relationship. No proprietary technology company will sign up for this.
2. Non-competition provisions. Occasionally, NDAs will prevent one party from competing with the other. This is another aggressive position with economic implications far beyond the NDA's typical "Let's talk" premise. Non-competition provisions may also raise anti-trust issues.
3. No-hire provisions. Some NDAs will prohibit the solicitation of the other party's employees or customers. Others will take the next step of seeking an actual no-hire clause. Either provision will drive how the parties interact with one another.
4. Lack of an independent development carve-out. Most NDAs provide exceptions for what kind of information is deemed confidential. A crucial exception that is sometimes missing regards independent development. It's important to be able to retain the right to come up with good ideas independently of those that a vendor, customer, reseller or joint venture partner might have.
5. Inappropriate period of protection. NDAs will typically provide for a confidentiality period of about five years. But, a business providing access to its most sensitive secret sauce that it expects to be valuable for decades would certainly want more protection than that. It's important to think through how an NDA will be used in a given situation before signing up for a certain period of protection.
6. Venue provisions. Parties will often agree in advance where to litigate a dispute arising out of a contract. But, this choice of location could create leverage for one party over the other. Be thoughtful about agreeing to venue in your business partner's backyard if it's thousands of miles away from where you work.
7. Inconsistencies with other applicable documents. If some other commercial agreement is signed as a result of the initial discussions, it will be important to consider how it relates to the NDA. A new agreement with its own confidentiality provisions could create confusing conflicts with the NDA. The NDA needs to be either completely superseded or carefully integrated into the new agreement.
Mr. Goldman is a legal, business development and human resources executive specializing in commercial contracts, securities/governance (public and private companies), mergers and acquisitions and management strategy. He has over 20 years of experience advising technology companies.
It’s Belle vs Beast in this penultimate issue! Belle faces the deadliest battle of her life and what she discovers will change everything!
Tagged 6 part series, art, artists, battle, Beast Hunter, belle, Belle Beast Hunter comics, Belle comics, books, buy comics, comic books, comic books online, comic store, comics, creature, Dave Franchini, editing, entertainment, evil, fairy, female leads, grimm universe, help, Igor Vitorino, introduction, Juan Manuel Rodriguez, life, monsters, new books, new books to read, new character, new hero, new threats, nightmare, nontraditional, philadelphia, read, reading books, realm, tale, the new evil is rising, vampires, villains, werewolves, writing, zenescope, zenescope comics, zenescope entertainment	
Archive Select Month November 2018 October 2018 September 2018 August 2018 July 2018 June 2018 May 2018 April 2018 March 2018 February 2018 January 2018 December 2017 November 2017 October 2017 September 2017 August 2017 July 2017 June 2017 May 2017 April 2017 March 2017 February 2017 January 2017 December 2016 November 2016 October 2016 September 2016 August 2016 July 2016 June 2016 May 2016 April 2016 March 2016 February 2016 January 2016 December 2015 November 2015 October 2015 September 2015 August 2015 July 2015 June 2015 May 2015 April 2015 March 2015 February 2015 January 2015 December 2014 November 2014 October 2014 September 2014 August 2014 July 2014 June 2014 May 2014 April 2014 March 2014 February 2014 January 2014 December 2013 November 2013 October 2013 September 2013 August 2013 July 2013 June 2013 May 2013 April 2013 March 2013 February 2013 January 2013 November 2012 October 2012 September 2012 August 2012 July 2012 June 2012 May 2012 April 2012 March 2012 February 2012 January 2012 December 2011 November 2011