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Contractual Agreements to Maximize Gains - Non-Disclosure Agreements

sensitive information on your protected or to-be-protected IPRs, on the preliminary results of your R&D, on your production processes, Trade Secrets and know-how, etc. While all your contracts will imperatively have to contain well-crafted confidentiality clauses that will protect this type of information, there is one crucial step you should take even before commencing your discussions with a potential business partner, and certainly before you share with him/her your precious secrets and sensitive information: ensure that they sign a Non-Disclosure Agreement (NDA).

This is the only way you can ensure that your potential counterpart, who may or may not eventually sign the cooperation agreement with you, does not disclose to anyone your confidential information, or does it only and exclusively under the conditions agreed with you.

Please note that certain information, if disclosed without your authorization, may be fatal for your business. For example:

  • You may not be able to protect your precious invention as a patent, because your IP law requires that inventions can only be patentable if absolutely “new”, i.e.: not already disclosed to the public. If you expose your invention before filing a patent application, and without previously signing an NDA, you may “kill” the novelty of your own invention.
  • The same applies to your industrial designs.
  • You may also lose your Trade Secrets that are protected only as long as they remain concealed and confidential. The same is applicable to your know-how.

Non-Disclosure Agreements, as the name suggest, are designed to prevent your potential business partners from disclosing any confidential information received by you in confidence and relating to your business. NDA may be bilateral or unilateral, depending on whether the obligations to maintain complete secrecy about certain information are undertaken by both parties, or by one party only.


A typical NDA contains the followings clauses:

  • Definition of Confidential Information.
  • Specification of the type of information not covered by NDA.
  • Indication of the choice of law and jurisdiction.
  • Listing of specific purposes for which the information can be used by the other party.
  • Possible indication of the entities with which the confidential information can be shared under certain specified conditions.
  • Provision of damages in case of unlawful disclosure of confidential information.
  • Specification of the duration of the NDA.

Should the NDA be breached, then you can go to court to seek remedy and compensation. However, we all know that this may be an expensive and time-consuming affair.


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