Masaryk University Spin-Off Developing Stress-Measuring Device
The new stress-measuring device is expected to have many practical applications
Non Disclosure Agreement in Practice
In the previous article about „MTA“ (Material Transfer Agreement), we proceeded from the premise that top science requires transfer. Primarily, we dealt with the transfer of physical objects such as biological materials, samples, compounds etc. In this article, we will move a step further towards intangible things, more specifically, information that can often be more vital and risk-prone than tangible assets.
If there is a unique research the results of which are not in a stage that would allow them to be protected by formal means of industrial property rights (e.g. a patent or a utility model) but we need to consult them or share them (scientific cooperation, negotiating with commercial partners), it is necessary to legally protect these results or information by other means. To this end, we can employ so-called non-disclosure agreement or “NDA”, “CA” (Confidentiality Agreement), “CDA” (Confidential Disclosure Agreement) or SA (Secrecy Agreement).
Generally speaking, these agreements need to be concluded before we start negotiating with any other institution, organization or business partner if we want to prevent such information from being leaked or disclosed to any third party. It needs to be said that disclosing any information regarding an invention that is not formally protected by means of a patent application causes such an invention to be virtually unpatentable. NDA can be concluded either for each specific project or the entire cooperation between the collaborating parties. Alternatively, the confidentiality provisions can be incorporated into the wider contractual framework as a part of another agreement. Same as MTA, NDA is an innominate contract, that is a type of contract that is not expressly governed by the Civil Code. At MU, it is concluded with the aid of TTO. The subject of these agreements is, as stated above, the protection of classified information exchanged between the contracting parties the mutual rights and obligations of whom are defined by it as well.
Each and every NDA is based on dulyspecified confidential information thatcan range from an in-detail list/specificationof the individual materials, data,know-how or research results (that can be listed in an annexe to the agreement) to very general and non-specific knowledge and findings. Alternatively, the classified information can be defined as all the information exchanged by the contracting parties or any information defined by said parties as confidential. The definition of confidentiality has to be followed by a confidentiality commitment on the part of the receiving party. The specific mechanisms of asserting said commitment have to be defined as well. The purpose for which the information is given should be stated as well because it can limit the handling of information and it serves as a valuable guide for the subsequent interpretation of the agreement.
From the point of view of the agreement’s viability, it is crucial to lay down the penalties applicable in case confidentiality is breached – most commonly a single contractual fine for every improper disclosure of information. Another option is a recurring contractual fine for every day of remaining in breach of the confidentiality agreement. In case a contractual fine is not expressly defined by the agreement, any improper disclosure of confidential information is considered a breach of the confidentiality agreement with all its legal consequences, chief among which is the right to compensation for the damages incurred. From the practical point of view, it is important to define the duration of the agreement and the conditions of its early termination. It should also take into consideration the way the information will be treated after the contract is terminated.
