A non-disclosure agreement, also known as an NDA or confidentiality agreement is a legal contract between two or more parties that prohibits the sharing of confidential information that has been revealed to one party.

By signing an NDA, the party is agreeing to restrict the disseminating of confidential proprietary information.

A non-disclosure agreement should include the following clauses:

1. Parties: The agreement should determine who are the parties to the agreement. Who is disclosing the information and who is receiving the confidential information.
2. Duration: The NDA should determine the length of the agreement. Will it last forever, 3 years, 5 years…etc.
3. Confidential Information: The agreement should clearly state what information is considered confidential. Is it all information that the receiver comes in contact with or specific information?
4. Written Permission: The confidentiality agreement should state that the receiver cannot disclose any confidential information without the written permission of the discloser.
5. Exclusion: The non-disclosure agreement should state what information is not considered confidential. For instance, information that is already known by the public is not confidential.
6. Property: The agreement should indicate that all confidential information disclosed remains the property of the discloser. Additionally, if the business relathionship ends between the parties, the receiver has the obligation to surrender and return any and all confidential information in his possession to the discloser.
7. Remedies: The NDA should clearly state what the remedies are in the event that confidential information is leaked or used by the discloser. Remedies can include obtaining an injunction, compensation…etc.

A non-disclosure agreement and a confidentiality agreement are the same thing. They both are agreements that protect private or confidential information from becoming public or disseminating.

A business should be signing non-disclosure agreements when:

1. Approaching third parties for technical assistance or services with a concept or idea
2. Presenting an invention or a business idea to a potential partner, inventor or distributor
3. Sharing a new product or technology to a prospective business licensee
4. Discussing the sale of a business with a prospective buyer
5. Seeking early-stage financial funding
6. Hiring employees or independent contractors that will have access to proprietary or confidential information in the course of their work
7. Receiving services from a business who may have access to confidential or sensitive information

There is no one-size fits all answer that defines what information is or is not considered confidential in a business.

In general, the term confidential information refers to any information that a businesses wishes to not make public. This can include information or knowledge related to, namely and not exclusively:

1. Business’ organisational stucture
2. Business activities
3. Business operating procedures
4. Business trade secrets
5. Business products and services
6. Intellectual Property
7. Finances
8. Business Plans
9. Business Transactions
10. Business Policies
11. Business Inventions

and many more!

Yes, you should be using a non-disclosure agreement even if a patent or trademark is already in place. An NDA can further help protect your rights when establishing business relationships with individuals or other businesses.

There is no strict answer as to how long the term of a non-disclosure agreement should be. However, in all instances, the term of the agreement should be reasonable.

What is considered reasonable? The definition of the term reasonable will vary depending on the industry and the type of information that was conveyed confidentially. For some types of businesses, a few years will suffice. However, for others, terms of 5 years may be applicable.

In most cases, non-disclosure agreement have a lifespan of 2-5 years depending on the industry.