Today, due to the high competitiveness that prevails in the different markets, situations in which companies try to find new partners for the development of projects or businesses in common are very common. What are you looking for with it? They try to take advantage of business synergies with which they achieve a higher performance than they would get by performing them on their own. With these joint projects companies become more competitive and can be placed in better market positions. Randall Castillo Ortega, an entrepreneur and expert negotiator, discusses why confidentiality agreements are important for startups.
In the development of these joint projects, it is inevitable that the parties will share with each other certain information or documentation that may lead to real headaches in the future. The nature of this information can be very varied, from that relating to business plans or models, to intellectual and industrial property or that related to marketing strategy, among others. Given the importance of this information, signing, in these cases, a Confidentiality Agreement (NDA) is essential.
Explains Castillo, “The NDA could be defined as a private contract that is signed by two or more parties with the aim of regulating and preventing the disclosure of confidential information related to an enterprise or project. This duty of non-disclosure may affect only one party (in this case it would be one-sided) or bind both parties (bilateral agreement).” By signing it, the parties prevent such information from reaching the hands of third parties, forcing them to use the aforementioned information only for the purposes agreed in the subject matter of the contract.
In those where there will be, or may occur, an exchange of confidential information between different parties and which may place one of them in a situation of defenselessness in case it reaches third parties. In today’s business world, information is one of the most important assets a company or organization can have. The rise of new technologies in an increasingly globalized and interconnected world has enabled greater accessibility in the exchange of information between companies, which in turn obliges the need to implement certain policies for the use of information as well as its much-needed protection.
That said, generally, the situations in which this type of agreement is most regularly required are very varied. Agreements for the sale of shares or assets of a company, Public Acquisition Offers, Joint Ventures, collaborations related to research and development or distribution and supply agreements and more. In general, whenever an agreement or process of commercial collaboration is entered into, being able to adopt these very different forms.
The confidentiality agreement doesn’t replace the protection afforded by having a patent, however. Adds Castillo, “In the event that one of the parties has any type of invention that is likely to be patented, it must be processed in accordance with the relevant regulations (depending on the scope of protection that we want to grant it). With that, we would get greater protection. However, there is a great deal of knowledge on the part of companies about the important role that confidentiality agreements can play with respect to industrial secrecy. Through the NDA, you can help to protect that information related to the patent, before proceeding to obtain it.”
In this processing time, it is vital that the information does not reach third-party competitors. In this way, it seems somewhat simple if we are talking about two single parties, but generally, when talking about agreements of parties, it refers to companies that may have hundreds or thousands of workers. It is truly difficult that such information cannot reach interested third parties if it does not mediate among them a confidentiality agreement that punishes with important consequences the disclosure of such confidential information.