What is a mutual NDA (non-disclosure agreement)? John Kiritsis, Esq. 212 922 0005
A way many business ventures go about protecting their intellectual property assets nowadays, is through adoption of mutual non-disclosure agreements.
Key Points. 212 922 0005 Kiritsis Law GroupUnlike your typical NDA, a mutual NDA involves multiple parties agreeing to protect proprietary and/or confidential information on behalf of the owner(s) of such confidential and/or proprietary information.
REMEMBER: Confidential Information includes any information or material that is proprietary to the Owner. Specifically listing certain types of documents or information reminds the parties of what types of information may be sensitive and important to the Owner. It is customary for agreements to provide that information obtained from other sources regarding the Owner is not protected under the agreement. Generally, a Non-Disclosure Agreement provides for certain exceptions. The Recipient is not required to keep confidential: i) any information that has been previously made public or information received from a third party; ii) information that the Recipient independently creates;
iii) information that must be disclosed by the operation of law (for example, a court order regarding information on a safety inspection that is at issue in a law suit); and iv) information for which the Owner has granted prior permission regarding its disclosure.
Other Issues. 212 922 0005 Kiritsis Law Group.In order for a mutual NDA to achieve its optimal desired objectives, it may be good idea for all of the underlying parties to keep in perspective that such agreement shall be for the parties’ mutual benefit. Three often overlooked issues that plagues many NDA agreements, include:
#1 Duration of Confidentiality
After the term of the Non-Disclosure Agreement, the Owner may require that the Recipient continue to protect the confidential information for a period of time. Depending on the nature of the information that was exchanged, a shorter or reasonable amount of time, like one year, may be more legally enforceable. However, information like trade secrets may benefit from being kept confidential for an indefinite amount of time.
Indemnity in this Agreement pertains to each party agreeing to hold the other liable legally and monetarily from any and all third party claims that result from the indemnifying party's material breach. Indemnification clauses protect the party who is disclosing information against wrongful disclosure by the party receiving information and any of its representatives.
A non-circumvention paragraph protects an Owner from being bypassed in a business transaction. This paragraph ensures that if the Owner shares its business contacts with the Recipient, the Recipient cannot do business with or engage with those contacts for any purpose. If the Owner is bypassed, the non-circumvention paragraph states that the violating party will be liable to pay for penalty fees.