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Choosing the correct confidentiality document

When drawing up a legal contract to protect confidentiality, using the appropriate legal document is essential.

Two documents are used to protect confidentiality:

  1. The confidentiality agreement. It is a legal tool that binds one or more parties to nondisclosure of confidential or proprietary information. It is suitable for collaborations.
  2. The nondisclosure agreement (NDA). It is a type of confidentiality agreement used when there's a one-way exchange of confidential information.

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When to use NDAs

  • Inventors use NDAs before formally protecting their rights with a patent application.
  • A business might require new employees to sign NDAs to protect confidential business information and trade secrets - for example, award-winning food recipes, proprietary software code and algorithms, unique fabrication processes, protecting client contact lists and service fees.

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When to use confidentiality agreements

Confidentiality agreements are typically used at the start of a joint venture or other business where both parties exchange confidential information.

An example of a confidentiality agreement is between an original equipment manufacturer (OEM) and a supplier. Both parties disclose information that could be harmful if leaked.

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