What is a Confidentiality Agreement?
A confidentiality agreement which is also known as a non-disclosure agreement or simply NDA is simply a contract between two or more parties where the subject of the agreement is a promise that information conveyed will be maintained in secrecy. This agreement can be unilateral agreement, where only the receiving party becomes obligated to maintain secrecy. A mutual confidentiality agreement is useful when both parties will be conveying confidential information such as inventor group. Standard unilateral confidentiality agreements, which are probably most common in innovation arena, are used when only one party is turning over confidential information perhaps to a potential or prospective licensee.
Advantages of Agreement
These types of agreements are particularly useful when one is disclosing information that is valuable so long as secrecy is maintained which include both invention related information and business related information. Indeed if you are going to attempt a claim the valuable information you possess is a trade secret you must take reasonable steps to preserve the secrecy. An agreement that obligates the recipient to maintain your trade secret in confidence becomes absolutely necessary because once the trade secret is generally known it is no longer a trade secret.
Indeed you can use a non-disclosure agreement to protect any type of information that is not generally known. And usE of confidentiality agreement means that those who receive the information are obligated to maintain the information in secrets. The creation of a confidential agreement is really the creation of a confidential relationship. Generally speaking, such confidential relationships can usually only be created in writing.
Reason not to rely on the Agreement
The reason you should never rely upon confidentiality agreement simply because it is exceedingly difficult if not impossible, to prove the existence of an oral agreement, and action that suggests the creation of such an agreement. This is because of the said problem. Essentially a case that relies upon an oral agreement will be decided based on who is believed. Indeed a simple confidentiality agreement will usually seem less intimidating but may actually provide the party disclosing the information more right. For example, in this simple confidentiality agreement, there are no provisions that would absolve the receiving party of the obligation to maintain the secret if and when the information became publicly available, as is the case in a fairly typical, longer confidentiality agreement.
Agreements that create a confidential relationship are particularly useful when you have an invention and you have not yet filed a patent application. Still, if you can get a confidentiality agreement signed even after you a file a patent application. Therefore, to maintain the rights to the invention while a patent application is pending a confidentiality agreement is required. Furthermore, it is quite possible that when disclosing an invention you will also disclose marketing and other business information not disclosed in the patent application, which itself could be maintained as a trade secret.till if you can get a confidentiality agreement signed even after you file a patent application that is preferable. While you will have placed a stake in the ground to define an invention when a patent application is filed, no exclusive rights will exists until the patent is actually granted. Therefore, to maintain the rights to an invention while a patent application is pending a confidentiality agreement signed after you file a patent application that is preferable. Therefore, to maintain the rights to the invention while a patent application is pending a confidentiality agreement is required. Furthermore, it is quite possible that when disclosing an invention you will also disclose marketing and other business information not disclosed in the patent application, which itself could be maintained as a trade secret.