What is a Confidentiality Agreement?

By Gene Quinn
January 3, 2008

confidentiality-agreement-335A Confidentiality Agreement, which is also known as non-disclosure agreement or NDA, is simply a contract between two or more parties where the subject of the agreement is a promise that information conveyed will be maintained in secrecy. These agreements can be mutual agreements, where both parties are obligated to maintain secrecy, or they can be unilateral agreements, where only the receiving party becomes obligated to maintain secrecy.

Mutual confidentiality agreements are useful when both parties will be conveying confidential information, such as for inventor groups. Unilateral confidentiality agreements, which are probably most common in the inventing arena, are used when only one party is turning over confidential information, perhaps to a potential investor or prospective licensee.

You can use a nondisclosure agreement to protect any type of information that is not generally known. The creation of a confidential agreement is really the creation of a confidential relationship. Generally speaking, such confidential relationships can usually be created both in writing and orally. It should be noted, however, that while some court cases in some jurisdictions do allow oral creation of such a relationship, and some court cases in some jurisdictions do allow actions to be used as evidence of the creation of such a relationship, YOU SHOULD NEVER RELY ON OR ANTICIPATE THAT A COURT WILL ENFORCE AN ORAL AGREEMENT OR AN AGREEMENT BASED ONLY UPON ACTION.

The reason you should never rely upon an oral confidentiality agreement is simply because it is exceedingly difficult, if not impossible, to prove the existence of an oral agreement and/or actions that suggest the creation of such an agreement. This is because of the “he said she said” problem. Essentially, a case that relies upon an oral agreement will be decided based on who is believed. Don’t put yourself in this situation if you can at all avoid it. It is my opinion that you should always get the agreement in writing (whenever possible), even if you need to water it down a little to get a signature.

We have several free sample confidentiality agreements that you can take and use as you see fit.  These are available on the IPWatchdog.com site at Free Sample Confidentiality Agreements.


The Author

Gene Quinn

Gene Quinn is a Patent Attorney and Editor and President & CEO ofIPWatchdog, Inc.. Gene founded IPWatchdog.com in 1999. Gene is also a principal lecturer in the PLI Patent Bar Review Course and Of Counsel to the law firm of Berenato & White, LLC. Gene’s specialty is in the area of strategic patent consulting, patent application drafting and patent prosecution. He consults with attorneys facing peculiar procedural issues at the Patent Office, advises investors and executives on patent law changes and pending litigation matters, and works with start-up businesses throughout the United States and around the world, primarily dealing with software and computer related innovations. is admitted to practice law in New Hampshire, is a Registered Patent Attorney and is also admitted to practice before the United States Court of Appeals for the Federal Circuit. CLICK HERE to send Gene a message.

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