Patent Nondisclosure Agreements

Where You Need a Lawyer:

(This may not be the same place you live)

At No Cost! 

 What is a Patent?

Individuals who create and invent things and ideas will need to protect those inventions from unauthorized use or distribution. Under federal patent laws, patents are given to inventors so that other parties in the United States are excluded from “making, using, offering for sale or selling the invention.”

A patent will usually last for 20 years. It may be used for any type of invention in any technology field. Nations that are members of the World Trade Organization (WTO) are expected to recognize and enforce a legal patent because parents are part of international agreements with the WTO.

If a patent was filed after June 8, 1995, it will last for a period of 20 years from the date that the patent application was filed. If a patent was filed before June 8, 1995, it will last for either 17 years from the date of the granting of the application or 20 years from the filing date of the application, whichever time is longer.

What is a Non-disclosure Agreement?

Non-disclosure agreements are essentially contracts or agreements between parties where the parties agree that they will keep private information that they exchange with one another in the course of their business or employment confidential. These types of agreements prohibit the parties from sharing information without the approval of the other party or parties.

A confidentiality agreement is another name for a non-disclosure agreement. A non-disclosure agreement may be part of an overall employment contract in a workplace, or it may be tailored specifically for each project as needed.

When a company does not want its trade secrets to be made public, a non-disclosure agreement is the best way to safeguard its secrets. The business or organization can ensure that its secrets remain secrets by adopting a non-disclosure agreement.

A non-disclosure agreement is typically created by an employer and, in general, requests that an employee keep corporate information confidential. These types of agreements, however, can also be used in the opposite manner.

For example, an employee may request that their employer sign a non-disclosure agreement if that company intends to use the individual’s personal or work data. In the area of patent law, a non-disclosure agreement may be used between an individual and another party who may be interested in their invention.

By signing a non-disclosure agreement, the other party agrees not to steal or disclose information about the invention.

What Does a Non-Disclosure Agreement Cover?

A non-disclosure agreement frequently contains data and guidelines, including:

  • The names of the parties whose interests are affected;
  • Identification of the information, topic, object, or concepts that should not be revealed, for example:
    • formulas;
    • recipes;
    • construction blueprints; and
    • other materials;
  • Whether any disclosure of the information is permitted;
  • Procedures for disclosing the information, if it can be done; and
  • Repercussions or penalties for illegal disclosures.

Certain non-disclosure agreements may also end on a specific date or when the project the agreement governs is finished. Typically, it is appropriate to specify the duration of the validity of the disclosure agreement.

What is the Duration of a Non-Disclosure Agreement?

Non-disclosure agreements will specify how long they last in the actual document. The receiving party is usually required to maintain the confidentiality of the shared information for a predetermined period of time.

In some cases, 3 to 5 year non-disclosure agreements are negotiated. Typically, the duration of American non-disclosure agreements is 5 years.

Why Would I Want to Use a Non-disclosure Agreement?

If an individual wants to pitch their invention to a potential manufacturer or inventor, they will want to ensure that the party the idea is pitched to will not steal the idea. One way for an individual to protect their invention is to use a non-disclosure agreement.

A non-disclosure agreement can offer an individual protection if their invention is not eligible for pending patent status or if the individual does not want to go through the patent process.

What Should I Include in My Non-disclosure Agreement?

An individual’s non-disclosure agreement should include several elements, such as:

  • What is and is not confidential: To best protect their invention, an individual should clearly state the information that they want kept secret. The individual should also establish what information does not have to be kept secret. An individual cannot require a party to keep quiet about information that they knew about prior to the disclosure;
  • Obligations of the other party or parties: An individual will generally want to establish that the other party cannot:
    • breach the agreement;
    • induce others to breach the agreement; or
    • induce others to get the confidential information through improper means; and
  • Time periods: The individual will need to decide how long the information must be kept confidential. The standard period of time is 5 years.

What Happens if Someone Violates My Non-disclosure Agreement?

If a party violates a non-disclosure agreement and uses the confidential information, the non-breaching party can sue for damages. There may be several different types of repercussions for violating a non-disclosure agreement, including:

  • Financial compensation paid to the non-breaching party for losses resulting from the illegal disclosure;
  • The employee’s dismissal from their position at work; and
  • Restitution or retrieval of the information, plans, or products that were disclosed.

A violation of a non-disclosure agreement can occasionally involve other legal matters as well, particularly:

  • Copyright laws;
  • Trademark laws; and
  • Patent laws.

Because of this, non-disclosure agreement breaches and intellectual property violations are frequently related. When a confidentiality agreement is entered into, certain information is promised to be kept confidential.

Breaking this promise is considered a breach of the non-disclosure agreement. Examples of violations of non-disclosure agreements may include, but are not limited to:

  • Using the secret knowledge to create a similar business;
  • Obtaining copies of private information and divulging insider knowledge to a rival for monetary or personal benefit;
  • Revealing private information to outside parties;
  • Revealing private information to a journalist, blogger, or reporter;
  • Posting the private data on social media, a blog, or an online news site; and
  • Communicating sensitive information to another person in public.

There are several issues to consider if a non-disclosure agreement has been breached. In order to determine the remedy for the breach, the original document must be analyzed.

In addition, the way the information was leaked must be examined. It is important to consider the economic value of the information as well as how the sensitive information was used. These details will be helpful to the court when calculating the monetary damages that should be awarded to the non-breaching party.

The non-breaching party will typically receive a damages award for a contract breach involving a breach of a confidentiality agreement. Compensatory damages are awarded to make the non-breaching party whole again.

Compensatory damages includes general damages and specific damages. General damages are intended to cover losses that are directly related to the subject matter of a contract, for example, failing to deliver a specific number of products.

Specific damages are intended to compensate the plaintiff for losses related to the breach but that do not directly result from the breach. One example of this would be the damage to the reputation of a business.

Do I Need a Lawyer to Help Me with My Non-disclosure Agreement Issues?

If you are considering entering into a non-disclosure agreement, or if a party has breached your non-disclosure agreement, you may want to consider consulting with a patent lawyer. An experienced intellectual property lawyer can assist you with drafting an agreement that satisfies your confidentiality needs.

If a dispute arises related to your non-disclosure agreement, your lawyer can help you file a lawsuit as well as represent you if you have to appear in court. If you are considering signing a non-disclosure agreement, it is important to have an attorney review the document and ensure you are aware of all of the requirements.

Law Library Disclaimer


16 people have successfully posted their cases

Find a Lawyer