Are you looking for help bringing an invention to market? Are you seeking financial assistance from a potential investor? If so, you may have heard of, or are putting together, a non-disclosure agreement.
A non-disclosure agreement, also known as a NDA or confidentiality agreement, is intended to prevent an idea or technology from being stolen and copied. In today’s business climate there are several things that you may want to consider before presenting your potential partners with an NDA.
Do you need a non-disclosure agreement?
You may want to consider using a non-disclosure agreement if you are concerned that information may be shared with a competitor (either on purpose or accidentally). If you are considering licensing your intellectual property, a non-disclosure agreement will help safeguard your idea from potential copy-cat inventions.
If you are looking for someone to invest in your product, you may find that some investors may be hesitant to sign a non-disclosure agreement. This is not because they intend to steal your idea and present it as their own, but more likely it is a question of time. Investors and venture capitalists may review many pitches each week and the extra paperwork may be seen as an unnecessary precaution. Your potential investor may even see an NDA as a deterrent to doing business with you. It may be wiser, or simply easier, not to share the portions of your idea or invention that may be vulnerable.
What should a well written NDA include?
You will want to define:
- To whom the agreement applies: is it between an individual and a company or between two companies?
- What is included and protected in the agreement that you draw up. Do you need to protect all aspects or are there specific details that you do not wish to share?
- A time frame for the duration of your NDA. How long does the agreement last? You will want to allow enough time to realistically bring said product to market or to close the financial deal.
- Where the agreements apply geographically — in Canada, North America, worldwide?
Additional tips when drafting a non-disclosure agreement:
Keep information on a USB key or on your own laptop — don’t email documents that you wish to protect.
Explore the internet for websites that may offer templates or examples of NDAs that may fit your particular business situation.
Be sure to discuss the use of a NDA with a legal professional, as it may be difficult or expensive to reinforce if not written properly.