What is an NDA..

What is an NDA, and how can it help your IP strategy?

…and how can it help your IP Strategy?

What is an NDA?

‘NDA’ stands for ‘Non Disclosure Agreement’, and is often used interchangeably with ‘Confidentiality Agreement’.  It is a contract between you and one or more other parties, setting out the conditions under which confidential information will be shared between you. 

Types of NDA

There are two basic types of NDA, namely ‘one-way’ and ‘two-way’ NDAs. 

A one-way NDA is appropriate when the confidential information is going one way (from one party to the other, but not vice versa), and the confidentiality restrictions only apply to the receiving party. A two-way NDA is more common, and has the effect of placing both (or all) parties to the agreement under the same confidentiality conditions.

So, for example, if you have designed a product and you want a manufacturer to 3Dprint a prototype for you, you might ask the manufacturer to sign a one-way NDA to cover your design drawings and any other confidential information you give them.

If, however, you need to work with a product designer to take an idea from concept to prototype stage, a two-way NDA is often more appropriate, to cover, not just your designs and ideas, but also the product designer’s confidential design process and other techniques and information they may use to realise your design.

How do NDAs fit into your intellectual property strategy?

The first thing to say here is that if you want to patent your invention, you must not disclose it to anyone except in confidence until a UK patent application has been filed.  And if you want registered design protection in any country except the UK, EU or USA, you must also keep details of a new design confidential until a UK design application has been filed.

BUT there are often circumstances when I advise clients to wait to file their UK applications for patents and/or designs until the product is fully (or nearly fully) developed. 

And the use of NDAs can allow innovators to consult and collaborate with third parties before their UK applications (for patents or designs) have been filed, without undermining their intellectual property rights. As a result, NDAs can form acritical part of your overall IP strategy, allowing you to speak to potential investors, product designers, manufacturers and others about your innovation, whilst keeping it “confidential”.

What should an NDA include?

This is very dependent on who you need to speak to and what you want the NDA to prevent, protect and/or preserve.  In the simple example above, where you just need the manufacturer to 3D print a prototype, all the NDA needs to do is ensure that the manufacturer won’t disclose the design drawings or details of the design beyond their organisation. 

However, if you are collaborating with a manufacturer or product design company, for example, you would also want to ensure that the NDA includes a clause regarding which party will own any additional intellectual property that is created as a result of the collaboration.  Many reputable product design companies will have their own NDAs, that specify, not only that they will not disclose your confidential information beyond their organisation, but also that any additional intellectual property created as a result of the design process will be owned by you (often on condition that you pay their bill(s)!

NDA templates

The best advice is to use a commercial solicitor to draw up a bespoke NDA that sets out, precisely, what conditions are to be placed around the disclosure of your confidential information to a third party. However, when resources are tight, you may want to draw up your own NDA (and perhaps just have it reviewed by your IP attorney or commercial solicitor).  The UK Intellectual Property Office provide useful information and some templates you can use here.

What can you do if someone breaches an NDA?

Signing an NDA is often a sign of good faith, and if you are careful about the people you enter into agreements with, they don’t usually need to be any more than that.  But NDAs are legal contracts and, as such, a breach of the conditions of the NDA would amount to a breach of contract, which is actionable through the courts. 

If this happens to you, consult an IP attorney immediately, because, not only can you consider court proceedings against the party that has breached the NDA, but there are provisions in many countries’ patent laws that allow a patent application to be validly filed, even after it has been disclosed as a result of a breach of an NDA.  Nevertheless, there is a limited time period to do so (6 months in the UK, so speed will be of the essence).

Need Help?

If you need help in relation this, or any other intellectual property issue, please book a free initial consultation by emailing vicki.strachan@strachanip.co.uk or visiting our website at https://strachanip.co.uk/contact

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