Nondisclosure & Confidentiality Agreements (NDA/CDA)
Click on questions to display answers
What is a NDA or CDA Agreement?
NDA is an acronym for nondisclosure agreement. CDA is an acronym for confidentiality agreement. These agreements are the same and designed to maintain the confidentiality of information. They can be used to create protections irrespective of whether the information is covered by a patent. They are commonly used while a patent is pending or before negotiations involving intellectual property assets, which can include trade secrets, patent applications, and other forms of business information. Once a nondisclosure is signed, the parties can discuss proprietary technology more freely knowing that if there is a misuse of the information there will be recourse in the form of a breach of contract action.
When should we use a confidentiality agreement?
If you need to discuss information that is confidential in nature, then a NDA agreement may be appropriate. If you have technology that you may want to patent, then before you discuss it with any person other than an attorney, you should use an NDA. These NDA agreements are useful any time you’re dealing with consultants that you may wish to hire in the future, or if you are considering a future business relationship with someone. If you openly discuss confidential information without first exchanging a NDA agreement, you may jeopardize any possible trade secret status of the information, international patent rights, and you may also risk prematurely starting the clock ticking for patent filing deadlines in the United States.
Where can I find a free NDA / CDA agreement?
We have placed a free basic NDA/CDA agreement on our website here: FREE NDA. This is a very commonplace NDA agreement, however, to maximize your protection we recommend having us prepare a custom nondisclosure agreement that will suit the needs of your specific situation. If you would like to discuss this option please contact us.
What happens if somebody will not sign a nondisclosure agreement?
If somebody refuses to sign a nondisclosure agreement, then you will proceed at your own risk. It is hard to argue, after-the-fact, that information is confidential if it was previously disclosed after somebody refused to sign a nondisclosure agreement. Without a signed NDA agreement, there is little basis to sue somebody with the claim that the information was intended as confidential. You may also risk the loss of international patent rights, and public disclosure can also affect patent rights in the United States. Conversations with attorneys are an exception to this rule because by law communications to attorneys are confidential and privileged, even without a nondisclosure agreement being signed.
Can a nondisclosure agreement protect nonpatentable concepts?
This is one of the main reasons for using a nondisclosure agreement. There are many types of information that are valuable, but that are not patentable. A signed nondisclosure agreement creates a contract between the parties that states there will be no misuse or negligent handling of the information.
If I have “patent pending” status do I still need a confidentiality agreement?
It never hurts to have somebody sign a nondisclosure agreement. It is definitely a conservative and good practice to have nondisclosure agreements signed prior to the time a patent application publishes. If the patent application has published, which it does now automatically at 18 months, then the information cannot be confidential, however, prior to that publication time, the information is confidential and could be covered using a NDA.
What is a noncompete?
A noncompete agreement is different from a NDA agreement. A noncompete agreement is one that contractually restricts the scope of competition of a person following a business separation. In some states where noncompete agreements are enforceable, an employee subject to such an agreement could be restricted from performing a certain type of work for a certain period of time after leaving the employer. For example, a noncompete agreement could state that a dentist who leaves a practice would not be able to open up a competing practice within 2 square miles for a period of two years. In other situations a covenant not to compete may restrict a person from contacting certain clients for a certain period of time. In the state of California, noncompete agreements do not hold up in court, but employment agreements can contain clauses against misuse of confidential information.
What should I do somebody is violating an NDA agreement? What if somebody has accused me of filing an NDA agreement?
If you are having any one of these two issues, you should contact our offices immediately to discuss your rights. Refrain from any contact with the other party without first speaking with a qualified attorney. The attorneys of Buche & Associates, P.C. are experienced with litigation surrounding confidentiality, noncompete, and non-solicitation agreements.