When should I use a non-disclosure agreement?

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All types of information can be exchanged under non-disclosure agreements, such as ideas, know-how, descriptions of inventions, chemical formulas, research or business information and negotiations, among others. The common characteristic, however, is that the disclosed information is valuable to the disclosing party to the extent that it must be kept away from the public domain.

In fact, in the European Union several types of intellectual property rights, in particular patents and industrial designs, demand novelty as a requirement for acquiring protection. In most of the EU countries, a creation is considered new if it has not been previously made available to anyone anywhere, unless under confidence obligations. Moreover, some intellectual assets are generally not patentable in many countries of the European Union, such as methods for doing business, and therefore can only be protected if kept out of the public domain. On the other hand, organisations can strategically decide that keeping information confidential is the most appropriate way of protection. Independently of the reason, in all these scenarios, non-disclosure agreements are the recommended tool to use for the purpose of protecting information when it is necessary to transmit it in confidence.

Thus, it is best practice to conclude non-disclosure agreement before engaging in negotiations for licence agreements and R&D projects, or whenever necessary to show innovative ideas, products or technologies to potential business partners or other persons. Confidentiality obligations may also be part of a larger agreement, such as license agreements, consortium agreements and employment contracts.