We draft detailed, customized confidentiality agreements for Maryland businesses and individuals,
and we act for clients when one is breached. For a telephone or in-office consultation, use the
contact form on this page or call (410) 752-9300.
What an NDA is for
A non-disclosure agreement, also called a confidentiality agreement, is a contract between two or
more parties protecting sensitive information that has to be shared for business to happen. Employers
use them with employees, independent contractors and consultants. Companies use them before opening
their books to a prospective buyer or investor. Anyone licensing intellectual property should have one
in place before disclosing the thing being licensed.
The information typically covered includes trade secrets, patent information, financial detail,
business practices, customer personal data, supply sources, forecasts and client lists. A well-drafted
agreement protects both sides, the disclosing party and the receiving party.
NDAs and licensing
Non-disclosure agreements travel with licensing agreements. Before entering a license, a licensor
should make sure everything confidential about the intellectual property is covered, because once the
information is out, a license term cannot put it back. See our page on
licensing agreements.
The terms worth arguing about
The outline below covers the clauses most NDAs contain. Real agreements get considerably more
specific, and the specificity is the point.
What counts as confidential
This sounds obvious and it is where most NDAs fail. Spell out the actual items each party will have
access to rather than gesturing at “confidential information.” Patent material, financial detail,
emails, voice messages, whatever it happens to be, list it. It is also worth naming what is already
public, so nobody argues later about information that was never secret.
Permitted use, and who else may see it
What may the receiving party do with the information? May it be shared internally on a need-to-know
basis? What happens when a third party is brought into the same transaction? Answer these in the
document rather than by email six months later.
Duration
How long does the agreement run, and what survives the end of the business relationship? An
obligation that expires with the contract may be no use at all for information that stays valuable.
Remedies for breach
Set out what happens if the agreement is broken. Deliberate disclosure and careless disclosure may
warrant different treatment, and both damages and injunctive relief should be addressed. Injunctive
relief often matters more, because stopping the spread of information is worth more than being paid
after it has spread.
When an NDA is breached
Breach of a confidentiality agreement is a civil matter, so enforcement means suing on the contract
rather than reporting a crime. A party who discloses deliberately can be sued for the full extent of
what the contract and the law allow.
Accidental disclosure is still a breach. Parties to a confidentiality agreement are held to a
standard of care, and leaking information through carelessness will generally put a party in breach
just as a deliberate act would, subject to the terms actually agreed. That is another reason the
remedies clause deserves attention before anyone signs.
Where the information at stake is also a trade secret, you may have claims beyond the contract. See
trade secret
misappropriation claims.
Talk to a Maryland IP attorney
Our attorneys have over 50 years of combined experience protecting intellectual property and
business transactions for individuals and companies. Use the contact form on this page, or call Jan I.
Berlage or David L. Hankey at (410) 752-9300.