If you are launching a new product or pitching investors, you need an NDA.
Throughout the existence of your business, you have likely developed unique ideas, systems, processes, strategies, and plans that you want kept secret. Your customer and supplier relationships might also require you to keep certain information like ordering history or billing addresses confidential. A non-disclosure agreement (NDA) is a strategic contractual mechanism with which you can keep this proprietary information commonly known as trade secrets confidential.
When to Put an NDA in Place:
- When you launch a new product with engineering or design that you have decided to keep secret. That is, when you will not be filing for patent, trademark (or service mark), or copyright protections on state and/or federal registries;
- When you pitch investors and funders who want proof that your concept is buttressed by strong legal shields;
- When you require manufacturers to assist create and deliver your product to market;
- When you are entering a joint venture, contractor, sub-contractor, or any business relationship with another person or entity;
- When your suppliers/vendors have access to your proprietary and confidential information because they work onsite or can electronically access such data; and
- When anyone you conduct business with has just enough information which may enable them to recreate your product or service.
If you are already in business, a good time to introduce an NDA is at a milestone event like a contract renewal or before a sales pitch.
NDAs should be tailored to your needs. Sure, you can download a generic document off some website, maybe even a semi-decent legal-oriented website. But in doing so, you risk getting a contract that could favor the other party, not you, and/or leaves out the very specific trade secret you want to protect. For relatively low cost, you can get an attorney to draft an all-inclusive NDA customized for your business. You can then exchange this tailored NDA with business partners, potential clients, investors, banks, suppliers and vendors.
Bonus tip: While you are at it, have your attorney draft an NDA that covers department employees.
We at Garcia & Gurney are happy to assess your specific needs and craft appropriate NDA protections for your business. Please call us at 925-468-0400 or contact us online.
Disclaimer: The contents of this article should not be construed as legal advice. This article is not an exhaustive list of issues that may arise when crafting confidentiality clauses or agreements. Businesses should seek the assistance of an attorney who will analyze multiple factors unique to each kind and size of business.
