How to Protect Business Secrets through
Non-Disclosure Agreement (NDA)?
In business or
production process, individual or organization being may have to share its
business secrets with others. Legal solution for this situation is to
enter into a Non-Disclosure Agreement agreement (NDA).
Non-Disclosure Agreement (NDA) are often used by inventors or companies when sharing business ideas, sample products which have just been created, patent and many other business secrets. This disclosure’s purpose is to explore the possibilities to cooperate, manufacture; to commercialize a particular product in relation to another company when seeking licensing contracts, financial source to develop a product; to deploy a business secret, to enter into a Merger and Acquisition transactions, or to create binding obligations on employees if they know or are known secrets of the company they are working for.
What does the content of the Non-Disclosure Agreement (NDA)
include?
NDA should begin with a
clear statement of who the owner’s non-disclosed information is (owner); party
who receives non-disclosed information (recipient); identify non-disclosed
information and the reason for disclosing such information to the recipient.
The most important thing of NDA is to identify the scope of non-disclosed
information or confidential information to avoid the parties in dispute if one
party discloses certain information. Another thing to keep in mind is that the
NDA can achieve the purpose of the parties when stipulating clearly how the
recipient has to protect that information and what is allowed or not allowed to
do with that information. In particular, it is necessary to detail that the
recipient has to take responsibilities if they violate the information security
obligations specified in the NDA.
Besides, the parties may
agree to a reciprocal NDA. Sometimes, the source of information is two-ways,
both parties will then disclose confidential information to each other, for
example when the two parties form a joint venture, or have intention of
acquiring the target company through M&A. Accordingly, NDA will refer to
the agreement of formation a joint venture, M&A which clearly states that
which confidential information two parties will share, what are the rights and
obligations of the two parties.
Of course, the best way
to keep a secret is to not tell anyone. However, this is not always possible in
the collaboration world when shared economy is thriving in Vietnam. If
the owner needs to share business secrets, they could sign with the recipient
an non-disclosure agreement or contract to avoid unfortunate circumstances.
ANT Lawyers - Law firm in Vietnam could help clients to create NDA in various business transactions in M&A, joint venture, IP commercialization, labour to address the needs of business requirements in Vietnam.
Source ANTLawyers: https://antlawyers.vn/library/intellectual-property-law/how-to-protect-business-secrets-through-non-disclosure-agreement-nda.html
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