Home – New Forums Starting your journey Tips on NDAs (Non Disclosure Agreements) needed!

  • This topic is empty.
Viewing 5 posts - 1 through 5 (of 5 total)
  • Author
    Posts
  • #995373
    molly1717
    Member
    • Total posts: 24
    Up
    0
    ::

    Hey all,

    A few brief questions about NDAs that I had (we are the discloser and looking for a one-way NDA in our dealings with a UK investment firm).

    I’ve had mixed advice from lawyers so I thought I’d put something out here to see what other people’s experiences are!

    1. Dealing with an investment firm in the UK – what should the governing law be? Their NDA says UK law but is there an international option available? Was wondering what the default clause in international dealings was?

    2. Protection. We don’t have a patent yet – how effective is an NDA overall? I still wouldn’t trust disclosing our entire process/ IP just on the basis of NDA protection – esp as we are considering a patent at the moment. Detecting a breach when our investor is on the other side of the world would probably be near impossible.

    3. Template NDA’s. I know these are broad so are they potentially sufficient to protect the overall discussion and our technology. I sense that some IP lawyers might say that they need to be drafted particular to each company and piece of technology. Thoughts?

    Thanks to anyone who wants to have a chat about this or give me tips on what to disclose/ not disclose to a potential investor.

    #1201535
    James Millar
    Participant
    • Total posts: 1,739
    Up
    0
    ::

    Hi Molly

    The resources you choose to devote to the NDA should probably be proportionate to the importance / value of the information you are passing over. So if you have developed the cure for the common cold or have some other information IP etc that represents the entire value of the business (and the value is significant) then spending decent money on legal protection is imperative. That means use a top IP law firm that can evaluate all of these items. No forums and no templates.

    I think it really comes down to the value of the IP. Are we talking ten’s of thousands, hundreds of thousands or millions?

    Helping build better businesses and better lives with expert financial and taxation advice. [email protected] www.360partners.com.au 03 9005 4900
    #1201536
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    Up
    0
    ::

    I wonder if [USER=20176]@JacquiPryor[/USER] could chime in?

    #1201537
    JacquiPryor
    Member
    • Total posts: 2,344
    Up
    0
    ::

    Eek – sorry for the delayed chime in!

    1. Dealing with an investment firm in the UK – what should the governing law be? Their NDA says UK law but is there an international option available? Was wondering what the default clause in international dealings was?

    Does the contract also discuss how a dispute would be handled? For example, if it says that a dispute would be handled by courts in the UK it would make sense that the governing law is also UK law. English law is often used as the governing law in business contracts for a variety of reasons – Contract law is not my area so please accept this as information – the reason for a governing law (which really could be anything) is so both parties know which law will ultimately interpret the contract if ever needed – allowing both sides, if ever needed, to gain some understanding or early advice as to how certain clauses or factors would likely be interpreted by the relevant courts. It is possible for example to have a party in Japan another in France and still choose English law as the governing law, but they might have provisions in a countract that dispute will be by way of mediation or in a court of a particular jurisdicition etc. I don’t think therefore you could have an ‘international law’ nor that there is a default option – but, imagine often the ‘default’ might be the country’s laws in which that person resides (for them, obviously this is UK). I also read something that English laws are often used in financial based contracts, as they (and New York Law) recognise the concept of trust.

    I found the following which might be helpful:

    http://www.lexology.com/library/detail.aspx?g=08a41896-6b21-47fa-91ed-25f9f4b216ce

    2. Protection. We don’t have a patent yet – how effective is an NDA overall? I still wouldn’t trust disclosing our entire process/ IP just on the basis of NDA protection – esp as we are considering a patent at the moment. Detecting a breach when our investor is on the other side of the world would probably be near impossible.

    One of the reasons you have parties sign an NDA when considering patent protection for an ‘invention’ is because to be valid your patent must be new (amongst other things) – so disclosure to another party that is not under an NDA might stop your patent being viewed as ‘new’ when you want to protect it. So, it is quite effective in this sense (if prepared correctly). However, it obviously cannot guarantee that the potential investor doesn’t breach it. If they are familiar with the field and are investors generally then they should be used to the sensitive nature of IP at times, and also – I would like to think – running their businesses appropriately without disclosing confidential information etc. If they were to breach then depending on the circumstances and time-frames involved and nature of breaches etc this could prevent you gaining a valid patent – but, in that case having the appropriate NDA in place could provide you the mechanism to instigate action against them for those breaches. Obviously a situation you wish to avoid nonetheless.

    3. Template NDA’s. I know these are broad so are they potentially sufficient to protect the overall discussion and our technology. I sense that some IP lawyers might say that they need to be drafted particular to each company and piece of technology. Thoughts?

    Unsurprisingly, I am of the school of thought that you should have yours drafted by a lawyer…

    There are probably templates out there that are suitable for certain businesses for certain transactions – however, how do you know which template is right for your business and for the purpose? If you don’t want to have a lawyer draft an entire agreement – I would at the very least suggest anything you draft yourself from a template should be shown to a lawyer for their comments. They may identify clauses of a template that are simply not going to ‘stick’ if ever needed; may find missing clauses that really should be included etc.

    If the UK party is providing you with their NDA, I would be particularly encouraging for you to set up a 30 minute consultation with an appropriate lawyer to gain at least some preliminary guidance on their NDA before you sign – it would be worth the cost in my view.

    Hope this provides some food for thought :)

    ^Information only; not legal advice.

    #1201538
    Paul – FS Concierge
    Keymaster
    • Total posts: 3,488
    Up
    0
    ::

    Thanks for the response

    JacquiPryor, post: 238947, member: 20176 wrote:
    Eek – sorry for the delayed chime in!

    1. Dealing with an investment firm in the UK – what should the governing law be? Their NDA says UK law but is there an international option available? Was wondering what the default clause in international dealings was?

    Does the contract also discuss how a dispute would be handled? For example, if it says that a dispute would be handled by courts in the UK it would make sense that the governing law is also UK law. English law is often used as the governing law in business contracts for a variety of reasons – Contract law is not my area so please accept this as information – the reason for a governing law (which really could be anything) is so both parties know which law will ultimately interpret the contract if ever needed – allowing both sides, if ever needed, to gain some understanding or early advice as to how certain clauses or factors would likely be interpreted by the relevant courts. It is possible for example to have a party in Japan another in France and still choose English law as the governing law, but they might have provisions in a countract that dispute will be by way of mediation or in a court of a particular jurisdicition etc. I don’t think therefore you could have an ‘international law’ nor that there is a default option – but, imagine often the ‘default’ might be the country’s laws in which that person resides (for them, obviously this is UK). I also read something that English laws are often used in financial based contracts, as they (and New York Law) recognise the concept of trust.

    I found the following which might be helpful:

    http://www.lexology.com/library/detail.aspx?g=08a41896-6b21-47fa-91ed-25f9f4b216ce

    2. Protection. We don’t have a patent yet – how effective is an NDA overall? I still wouldn’t trust disclosing our entire process/ IP just on the basis of NDA protection – esp as we are considering a patent at the moment. Detecting a breach when our investor is on the other side of the world would probably be near impossible.

    One of the reasons you have parties sign an NDA when considering patent protection for an ‘invention’ is because to be valid your patent must be new (amongst other things) – so disclosure to another party that is not under an NDA might stop your patent being viewed as ‘new’ when you want to protect it. So, it is quite effective in this sense (if prepared correctly). However, it obviously cannot guarantee that the potential investor doesn’t breach it. If they are familiar with the field and are investors generally then they should be used to the sensitive nature of IP at times, and also – I would like to think – running their businesses appropriately without disclosing confidential information etc. If they were to breach then depending on the circumstances and time-frames involved and nature of breaches etc this could prevent you gaining a valid patent – but, in that case having the appropriate NDA in place could provide you the mechanism to instigate action against them for those breaches. Obviously a situation you wish to avoid nonetheless.

    3. Template NDA’s. I know these are broad so are they potentially sufficient to protect the overall discussion and our technology. I sense that some IP lawyers might say that they need to be drafted particular to each company and piece of technology. Thoughts?

    Unsurprisingly, I am of the school of thought that you should have yours drafted by a lawyer…

    There are probably templates out there that are suitable for certain businesses for certain transactions – however, how do you know which template is right for your business and for the purpose? If you don’t want to have a lawyer draft an entire agreement – I would at the very least suggest anything you draft yourself from a template should be shown to a lawyer for their comments. They may identify clauses of a template that are simply not going to ‘stick’ if ever needed; may find missing clauses that really should be included etc.

    If the UK party is providing you with their NDA, I would be particularly encouraging for you to set up a 30 minute consultation with an appropriate lawyer to gain at least some preliminary guidance on their NDA before you sign – it would be worth the cost in my view.

    Hope this provides some food for thought :)

    ^Information only; not legal advice.
    Jacqui;-)

Viewing 5 posts - 1 through 5 (of 5 total)
  • You must be logged in to reply to this topic.