Nondisclosure agreements in California

On Behalf of | Sep 8, 2021 | Intellectual Property Litigation, Trade Secrets |

Most companies have valuable confidential information or trade secrets which they protect from being leaked to the public. In business transactions, companies receive and exchange private information with their customers or suppliers. To prevent unauthorized disclosure of such valuable information, businesses usually require a nondisclosure agreement, also known as an NDA.

The NDA prohibits the second party, an employee or business partner, from disclosing confidential information created by the first party. In the case of a mutual agreement, the NDA prohibits both parties from disclosing confidential information. If the confidential information becomes public or reaches a third party, all the liability falls on the party responsible for the disclosure. According to California Law, NDAs are enforceable and in case of a breach, the parties affected may seek damages and/or equitable relief in court.

What is confidential information?

The parties signing a nondisclosure agreement usually agree on what to consider “Confidential Information.” Common items listed as confidential information include trade secrets, business assets and relationships, data security, and intellectual property shared between business partners, business plans, marketing plans, and manufacturing processes.

Confidential information, however, does not include:

  • Any information available to the public;
  • Commonly used algorithms and programming practices; and
  • Any information created independently from Confidential Information.

What are the elements of the nondisclosure agreement?

Most NDAs are composed of either a unilateral or mutual agreement that contains the detailed definition of what the “confidential information” happens to be. The NDA may also contain exclusions to the agreement as well as the time in which the agreement will be enforceable. After considering an NDA for your intellectual property, be sure to contact an attorney to help you navigate the governing law and miscellaneous provisions that may come with your agreement.