Your trade secrets are the things that make your business truly unique. From a secret family recipe to a unique type of code or a pending patent application, these trade secrets set your business apart in a way that the competition can’t touch. But it can be tricky to keep trade secrets, well, secret the more people you involve in your business. This is where a non-disclosure agreement (NDA) can help to protect your trade secrets as your business flourishes. In today’s blog, let’s discuss why you need an NDA and when.
What Is a Non-Disclosure Agreement?
An NDA is a contract between employee and employer or business and vendor, in which the parties agree not to disclose certain confidential information about the business so as to continue working together in the smoothest way possible. Depending on the terms, an NDA may even require parties to keep the confidential information to themselves even long after they stop working with the business.
The truth is that very few businesses are islands. Most need support from designers, manufacturers, assistants, and more. As a part of their work, they may need to become privy to your trade secrets. To keep those secrets from reaching the public, you can draft a legally binding non-disclosure agreement that allows the necessary parties to have access to your trade secrets but be unable to share them.
When Do You Need an NDA?
NDAs are crucial to protecting your trade secrets, especially as your business scales. But the worst thing you can do is draft an NDA too late. If someone has access to your trade secrets before they’ve signed an NDA, there’s nothing that legally ensures they won’t share that trade secret.
The best time to have an NDA drafted is before you even begin to speak with designers, manufacturers, employees, and other vendors. Consider the people who will need to know your trade secrets in order to do business with you. Not everyone will need the same level of access to your confidential information, so these NDAs might vary. You should have an NDA ready to go when signing on with a new vendor, so that everything is squared away before they even begin work.
What Do You Need In Your NDA?
There are typically two types of NDAs: a unilateral NDA, in which one party agrees not to share confidential information; and a mutual NDA, in which both parties agree to keep the confidential information secret. But the nature of your NDA will be unique to your situation. A good NDA should include:
- A clear definition of what information must be kept confidential as well as the full scope of that confidentiality;
- Any exclusions from confidentiality; and
- The full term of the agreement.
It’s best to have an attorney draft your NDA in order to ensure that it fully protects your trade secrets. Talk to your IP attorney about your situation and they will draft NDAs that you can use with designers, manufacturers, and more.
At Garcia-Zamor, we have over two decades of combined experience in the field of intellectual property law. We can help you when it comes to protecting your IP, including drafting NDAs and more. Contact us today for more information or to set up a consultation.