Fillable Printable Confidentiality and Confidential Disclosure Agreement

Confidentiality and Confidential Disclosure Agreement

Condentiality and Condential Disclosure Agreement (CDA)

Intellectual Property Ofce is an operating name of the Patent Ofce

Condentiality and Condential Disclosure Agreements (CDA)

Condentiality

Are you an inventor trying to contact a potential manufacturer,

nancial backer or other partner? Or perhaps you are just

thinking about sharing your ideas with someone about a new

product or process you have developed - for example in

planning to start a business. If so, have you thought about

condential disclosure agreements and how these could help

you? Read on…

Sharing new knowledge and original work which you intend to

use commercially requires a high degree of mutual trust.

For example, to get a patent an invention must be new, in the

sense of not having previously been available to the public. If

you tell even one person about your invention before a patent

application has been led then this may invalidate any patent

granted and leave you with no rights, unless the disclosure was

made “in condence”.

This is why it is critically important to consider condentiality

before you approach another company or individual when

seeking to develop your ideas. In addition to any inventions

you may wish to patent, unpatented but condential ideas

(known as “trade-secrets”) can be an equally important

intellectual property asset. Trade secrets can be difcult to

protect but Condential Disclosure Agreements can help.

Condential Disclosure Agreements (CDAs), also known as

Non-Disclosure Agreements (NDAs), are legally-binding

documents that enable you to record the terms under which

Condentiality and Condential Disclosure Agreements (CDA)

you exchange secret information. You are strongly advised to

consider using one if you are going to disclose the details of

your secret technical idea to another party. That is not to say

that a duty of condence cannot arise even in the absence of

such a contract. But recording the duty in a written agreement

gives added legal certainty.

The other party to the agreement can be any person or an

organization. For example, it may include not only potential

business partners but also your own associates, contractors,

employees or even your family or friends. Normally

condentiality clauses will form part of a broader agreement,

such as a contract of employment. But for new companies it’s

important to consider what may happen in the event that

associates/contractors or employees do not, for one reason or

another, actually sign up to a contract.

Thus if you intend to communicate your idea to another party

an important point to consider before doing so is: do I need to

use a CDA? Having a signed CDA means you will be able to

tell a potential partner more about your invention with more

safety. Also, without one you may not be able to tell them

enough to get them interested.

But do you always need to use a CDA? There will be some

companies who, for perfectly valid business reasons, do not

wish to sign a CDA; this doesn’t mean that they are dishonest

but simply that they may not wish to receive any condential

information: for example, because they want to avoid conict

with areas they may already be working on. So, on meeting

another company for the rst time you may only need to outline

Condentiality and Condential Disclosure Agreements (CDA)

the commercial benets of your invention without having to tell

them about its technical features. If you can explain what your

idea does, but not how it functions or how it’s made, that may be

enough to excite interest at a rst meeting. Thus, you might just

say something along the lines of: “my new product costs ten

times less to produce and lasts for twice as long as those on

sale in the supermarkets”.

Nevertheless you should still think about the risk of not having a

CDA in place. Indeed when entering into discussions with

potential collaborators or partners it is good practice to discuss

condential disclosure requirements.

Points to consider when using CDAs

• It is highly recommended that you consult a solicitor or a

patent agent about how to protect your ideas and the risks of

communicating these ideas to someone else.

• Ask the person/company you are communicating with if

they have a CDA they may wish to use that serves both of

your interests - but read it carefully and consider taking legal

advice.

and/or

• Have a CDA prepared and send it to the other party for them

to consider.

Condentiality and Condential Disclosure Agreements (CDA)

• Make some sort of record of what was disclosed at a

meeting. For example, you could ask the other party to

acknowledge a paper copy of a computer presentation, or

drawings etc. that describe the technical details of your

idea and the date on which you rst showed it to them, in

whatever form (eg. paper, an email attachment or an

internet video streaming player).

• There is no “one-ts-all” CDA. The following is an example

of a CDA that shows the types of clauses that are often

found in these documents. This typical agreement is

merely an example and therefore may not apply directly to

your particular circumstances.

Condentiality and Condential Disclosure Agreements (CDA)

An Example of a Condential Disclosure Agreement (CDA)

There’s no set formula for a CDA. They come in all shapes and

sizes, from the short and simple to the long and legalistic. This

one falls somewhere in the middle and is, in our experience, the

sort that people can most readily be persuaded to sign.

CONFIDENTIAL DISCLOSURE AGREEMENT

Between:

[Company name and address]

and

[Your name and address]

1. On the understanding that both parties are

interested in meeting to consider possible

collaboration in developments arising from

[your name]’s intellectual property it is

agreed that all information, whether oral,

written or otherwise, that is supplied in the

course or as a result of so meeting shall be

treated as condential by the receiving party.

2. The receiving party undertakes not to use the

information for any purpose, other than for the

purpose of considering the said collaboration,

without obtaining the written agreement of the

disclosing party.

Condentiality and Condential Disclosure Agreements (CDA)

3. This Agreement applies to both technical and

commercial information communicated by either

party.

4. This Agreement does not apply to any

information in the public domain or which the

receiving party can show was either already

lawfully in their possession prior to its

disclosure by the other party or acquired

without the involvement, either directly or

indirectly, of the disclosing party.

5. Either party to this Agreement shall on

request from the other return any documents or

items connected with the disclosure and shall

not retain any unauthorized copies or

likenesses.

6. This Agreement, or the supply of information

referred to in paragraph 1, does not create any

licence, title or interest in respect of any

Intellectual Property Rights of the disclosing

party.

7. After X [numerals] years from the date

hereof each party shall be relieved of all

obligations under this Agreement.

Condentiality and Condential Disclosure Agreements (CDA)

Signed [Your signature]

For [Your business/trading name if relevant]

Date

Signed [Company representative’s signature]

For [Company name]

Date

Condentiality and Condential Disclosure Agreements (CDA)

For paragraph 7 you should consider how long you wish the

CDA to provide protection for. Typically CDAs have terms of

about two to ve years.

You don’t have to follow this model, word for word. Whatever

you do write remember that your main objective is to get

people to sign it - something they’ll never be eager to do. A

shorter document may be more user-friendly but will be full of

dangerous loopholes for all parties if too much is left

unspecied, while a longer one bristling with restrictive

clauses and legal jargon will scare people off.

The person or company you want to talk to may also want you

to sign their own CDA, as it may be difcult for them to discuss

your product fully without disclosing sensitive information

about their own business. Check any such document carefully

before signing, to make sure it doesn’t unreasonably restrict

your own future activities. If you want to show willing, send a

short covering letter with a couple of paragraphs along these

lines:

“As you will appreciate, it is important that all exchanges of

information should at this stage be in condence. I have

therefore drafted a condential disclosure agreement which I

hope you will nd acceptable. A copy is enclosed.

For my own part, I shall be happy to sign your own condential

disclosure agreement, assuming its conditions are broadly

similar to mine.”

Even then you may not be out of the woods. Big rms especially

fear that they could already be working on a similar idea, so

they may insist on evidence of a patent or patent application to

avoid any argument about dates and content. Some won’t

discuss anything but a patent, and may even insist that you

sign a document accepting that they won’t be held to

condentiality, even though in practice they may well respect it.

It’s up to you to decide whether to accept the risk.

Adapted from:

“The Business of Invention: the Essentials of Success for

Inventors and Innovators”

by Peter Bissell and Graham Barker available from

“http://www.abettermousetrap.co.uk”

We cannot take any responsibility for any events that arise

from your use of the example CDA given above or any of the

information in this document. We advise you to get

independent advice before acting on any matters that may

involve the issue of condentiality.

Condentiality and Condential Disclosure Agreements (CDA)

Concept House

Cardiff Road

Newport

NP10 8QQ

Tel: 08459 500 505

Minicom: 08459 222 250

Fax: 01633 817 777

www.ipo.gov.uk

For copies in alternative formats please

contact our Central Enquiry Unit.

When you no longer need this booklet,

please recycle it.

Revised: April 07

DPS/P400/03-09