How can I protect my company’s secret information making sure my employees keep it confidential? This is a question that we are often asked by business owners in Georgia.
You established your business because you have a great product, technology, or service. You want to tell the world about it, but it is also important to protect your idea from competitors, particularly in the development stages of your business.
When you are looking for investors, working with others to develop a product, or otherwise turning your idea into a business, it is important to be careful about sharing information. You do not want to disclose confidential information and have it land in the hands of your competitors or be used against your interests.
It is important to be aware of what information you disclose and how it gets disclosed to outsiders. Do not share nonpublic information, such as business plans, customer lists, marketing strategies, pricing, product designs, or development plans without first entering into a non- disclosure agreement (“NDA”).
NDAs allow parties to explore business relationships while protecting important information about the business. NDAs create confidential relationships, and restrict unauthorized disclosure or use of your proprietary information.
The NDA can be unilateral (where only the disclosing party’s information is protected) or mutual (where both parties’ confidential information is closed). The NDA can also specify that the relationship itself is to be kept confidential. Mutual NDAs are generally preferred, because, during most business discussions, both parties disclose information even though mutual disclosure might not have been contemplated at the beginning of the relationship.
Several key points NDAs should cover are:
Definitions: The definition of confidential information should be as broad as possible if you are the one disclosing the information, but, narrower if you are receiving the information.
Exceptions to Confidential Information: NDAs should clearly define exceptions to confidential information, such as information that is in the public domain or which is required to be disclosed by a court.
Treatment of Confidential Information: NDAs should provide for how all information is to be disclosed, and how to deal with information disclosed orally. Other treatment issues to consider are: whether photocopies will be allowed, how confidential information is to be stored, who will have access to the information, and what will happen with information once the relationship has ended. It is important to be aware of all burdens placed on both the disclosing party and the receiving party.
You should discuss your specific business needs with your attorney to draft a NDA that will protect your business information. Contact Williams Oinonen LLC today for more information about how to protect your proprietary information.