The Intellectual Property Guide by Myra Tawfik & Karima Bawa

Author:Myra Tawfik & Karima Bawa
Language: eng
Format: epub
Publisher: Brush Education

Signing an NDA

When having another party sign an NDA that you have drafted, ensure that the party signing the NDA is an authorized signatory with binding authority. If the person who signs the NDA does not have signing authority or authority to bind the receiving party, then the NDA may have little or no value to you.

What happens if a third party, such as a potential investor, refuses to sign your NDA? You could consider proceeding without a signed NDA after having fully weighed the risks. You could also adopt strategies to mitigate some of the potential risks. For instance, you could severely limit the information you disclose, or think about filing for a provisional patent in the United States prior to disclosure. If your disclosures are made in the United States, you would then be free to provide the relevant information covered in the provisional patent since you would be relying on patent protection rather than an NDA to secure your rights. Provisional patents were discussed in chapter 3.

In circumstances where you are signing an NDA that someone else has drafted, it is prudent to seek independent expert advice to ensure that you fully understand everything that is contained in the agreement and that you are comfortable signing it.

Make sure that you aren’t agreeing to something other than an obligation to keep the other party’s information confidential. Sometimes, for example, drafting parties may include a provision that prevents you from engaging in acts that would be competitive to their business or an obligation that prevents you from recruiting their employees. These kinds of clauses are generally considered to be outside the scope of NDAs, and therefore inappropriate for this type of agreement.

Finally, don’t assume that merely signing an NDA with another party gets you on your way to doing business with them. This is not the case. An NDA usually only opens the door for further discussions to take place. You will likely need to enter into other agreements such as licensing, joint venture, or sale agreements in order to fully engage in a business relationship with that party.

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