Properly protect your Intellectual Property in preliminary discussions

30 Jun 2014
It is usual for parties who are considering entering into a business relationship or collaboration to put a Non Disclosure Agreement (NDA) in place to ensure the information and ideas they each disclose remains confidential and to prohibit the other party from using it for their own purposes ahead of entering into a full contract.

However, some NDAs may not be properly protect your intellectual property rights (IPRs). IP owners (such as franchisors, rights holders or software licensors) face the risk that potential business partners in foreign jurisdictions may, often when discussion have broken down, attempt to apply for trade marks or IPRs in respect of the subject matter or project under discussion.

We recommend that an NDA should always contain:

  • a provision stating that nothing in the NDA grants the recipient party an express or implied licence in any patent, trade mark, copyright or other IPRs;
  • an acknowledgement from the recipient that all existing and future IPRs in the information disclosed remain the exclusive property of the party which disclosed it;
  • a restriction on the recipient applying for or obtaining any intellectual property protection in respect of the information disclosed; and
  • a statement that all IPRs relating to any drawings, document and work carried out by the recipient using the disclosed IP will belong to and vest in the discloser and a requirement for the recipient to do anything necessary to enable the IP owner to obtain, defend or enforce its rights in such output.