The utility of confidentiality agreements

Confidentiality agreements are a powerful and useful tool for most businesses. You may think that because of your size and the fact that you "trust" all of your partners or employees, you have no need for such agreements. In a perfect world, you may be correct. In the world that most businesses operate in, confidentiality agreements are like insurance. You may be able to survive without them for a while, but eventually, an incident will occur where you will regret their absence.

Whether you need to protect customer lists, chemical formulas, inventions prior to patent filings, or trade secrets, a confidentiality agreement can be drafted to meet your needs.

Confidentiality agreements come with many names, such as non-disclosure agreement (NDA), confidential disclosure agreement, or an agreement covering trade secrets or other proprietary information. The scope of the agreement can be narrow, broad, may cover a single transaction between parties or it may protect a long-term, ongoing relationship between entities.

Generally, they protect the parties from intentional or accidental disclosures of confidential or proprietary information. They may govern the information a single employee has or they control the relationship between companies exploring a joint venture, merger or acquisition.

When dealing with entities, a party should be careful to assess the information handling procedures and policies of the other party, as it does little good to require they treat your information as confidential and apply their practices, if they have poor control or low standards for handling this information.

You should discuss the purpose of the agreement with your attorney and explain your aims and goals. They can describe the various options that may be available and can work with you when negotiating with other parties, and draft the agreement.