Dinn, Hochman & Potter, L.L.C.
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Considerations in drafting a nondisclosure agreement

If you have done business-to-business negotiations for any length of time, then you are likely familiar with one of the ubiquitous aspects of such dealings: a confidentiality, or nondisclosure agreement. These are typically anywhere from two to five or six page documents that seek to protect from unauthorized information that one or both parties considers to be sensitive to its business, such as trade secrets or other proprietary information.

Many of these agreements are “boilerplate” in nature, meaning that they contain roughly similar terms and conditions such as how confidential information is to be defined and marked, how long it should be protected, the duration of the term of protection, and whether such information needs to be returned to the disclosing party after the end of the agreement. Especially if you have encountered several such agreements, you may be tempted to think that you have “seen them all” and to simply give them a cursory glance-over before signing them. That could, however, be a costly mistake.

While most of your prospective business partners will not seek to use a nondisclosure agreement to take advantage of you,blind trust is generally not a sound principle of new business-to-business relationships. More likely, but equally as serious, is the possibility that the agreement may simply be poorly drafted, and contain provisions that can inadvertently place your sensitive information at risk. Poor definitions of what exactly constitutes confidential information, imprecise provisions for identifying information as confidential (for example, how to handle oral disclosures) and too-short periods of protection are but a few ways that a nondisclosure agreement can fail to provide you with adequate protection.

If you are unsure whether a nondisclosure agreement that you are considering is sufficient to protect your confidential information, or as a good business practice to have someone with legal training and experience review all of these agreements before you enter into them, you may want to consider consulting with a business and commercial law firm here in Ohio to go over them for you in advance.

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5910 Landerbrook Drive, Suite 200
Cleveland, OH 44124
-6500

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