Confidentiality agreement

When is a confidentiality agreement a good idea?
During the parties' negotiations on the sale or commercialisation of an invention, it will often be necessary for the parties to provide information of a confidential nature. In some cases, for example, you will need to supply your future trading partner with information (e.g. drawings, calculations or prototypes) in relation to your right before entering an agreement.

You should use a confidentiality agreement for this (also known as a Non-Disclosure Agreement, NDA). This is a legal document which ensures that the parties do not use the knowledge they acquire from e.g. a meeting or the supply of confidential material.

This is particularly important in cases where you have not yet submitted a patent application. The reason for this is that there is a requirement for the invention to be new at the time at which the application is submitted. This means that the invention must be new throughout the world and not made available via e.g. the Internet, journals, patent applications, issued patents, brochures, exhibitions or presentations before the company has filed its patent application.

Therefore, if the invention is shown to other parties before the patent application is filed, the business should first ensure that a confidentiality agreement is signed, so that a subsequent patent application is not prevented due to failure to meet the "novelty requirement" in connection with previous free dialogue with third parties.

What exactly does a confidentiality agreement entail?
By signing confidentiality agreements the parties undertake to keep secret the existence and content of the cooperation as well as any information the parties may exchange in regard to the other in connection with the agreement.

Use of a confidentiality agreement means you can better ensure that the other party does not use your confidential information to copy your idea or invention.

In general, you can say that as a minimum a confidentiality agreement should include:

  • Parties to the agreement: Who is entering the agreement and to whom does the agreement apply?
  • Purpose: What is the purpose of keeping the information secret?
  • The obligations of the parties: What obligations do the parties hold in relation to the agreement?
  • Exceptions to the agreement What information could be excluded from the agreement?
  • The term of the agreement: For how long are the parties obligated to keep information confidential.
  • Breach: What happens if one of the parties does not comply with the obligations defined in the agreement?
  • Disputes: How and where should any disagreements be resolved?

Go to the standard contracts and customise your own confidentiality agreement.