14 Dec The importance of the non-disclosure agreements (NDA)

Nowadays, due to the high competitiveness around the different markets, there are very frequent the situations wherein companies try to find new partners for the development of joint business. What are they looking for? They endeavour to gain business advantage through corporate synergies with wich they can obtain a higher performance than they would obtain by their own. With these joint businesses the companies manage to become more competitive on the markets and are able to positioning in a better situation on the market.

So far everything sounds phenomenal: we have a joint business with wich we obtain a higher performance in a shorter time and employing fewer resources.

Nevertheless, as the old saying goes “all that glitters is not gold’, because of the fact that in the development of these joint business result unavoidable that the parties share certain information or documentation which is able to cause many headaches in the future. The nature of this information can be diverse: related to business plan, intellectual and industrial property or marketing strategy among other things.

Given the importance of the aforementioned information, as legal advisors we would like to highlight the indispensable nature of signing a “None-Disclosure Agreement”. The “NDA” could be defined as a private contract that is signed by two or more parties with the purporse of regulating and avoiding the disclosure of this confidential information related to the companies or the joint business. This confidentialy obligation may be binding for only one party (in this case it would be unilateral) or for both parties (bilateral agreement).

With the signing of the same, the parties avoid a priori that this information is leaked to thirdparties, compelling the parties to use the aforementioned information only for the purpose agreed in the object of the contract.

In which situations result advisable to sign a Non-disclosure Agreement?

In those wherein it is gonna be an exchange of confidential information (or it will be probably) between differents parties that may be placed one of them in a vulnerable situation as a result of the disclosure of the aforementioned information.

In today’s global business world, the information has become in one of the most important assets of a company. The emergence of new information and communications technologies in an increasingly globalized and interconnected world has enabled a greater accessibility in terms of exchange of this information. All of this has led to the need of measures adoption in order to ensure better protection ot the aforementioned information.

The situations wherein more is frequent to sign an NDA are very varied: purchase agreement of shares or assets of a company, OPAS (Public Acquisition Offerings), Joint Ventures among others

Does the NDA replace the protection granted by a Patent?

The answer is a resounding no. In case one of the parties had some kind of invention which would be able to be patented, he shall proceed to patent it, and he will obtain a greater protection. However, there is a huge lack of knowledge on the part of the companies about the paramount role that the NDAs can play with respect to industrial secret. Through the NDAs we can protect “this information” relative to the patent, before we have proceeded to obtain it. In this timeframe of obtaining the patent it is very important ensure that this information does not reach third-party competitors. At first sight, it seems really simple because we have an NDA between two unique parties, but is not as simple as someone can imagine, because of the fact that the NDA is agreed between two parties who may have a workforce of hundreds or thousand workers among which is very probably that take place a disclosure of information. It is truly complicated that the aforementioned information does not reach interested parties if there is not a None-Disclosure Agreement which compels not only the parties but also the workers of them.

Is there a standard model of a None-Disclosure Agreement?

Unafortunately for many of our readers the answer is no. Each NDA shall be different and it shall be adapted to the specific circumstances of each case and to the particular needs of the clients.

In Navarro Llima Abogados we have highly qualified lawyers specialized in corporate law with experience in the drawing up of these contracts. If you have any questions thereon, please do not hesitate to contact us.

Javier Navarro Lacambra

Corporate lawyer.