For more posts like this, please visit The Startup Law Blog. Disclaimer: this post is for informational and educational purposes only. It is not intended to provide any legal advice. What information should NDAs cover? In which scenarios should you sign a NDA? When should you enter into an NDA? This chipmunk is cute, not confidential. Important distinction. What are some red flags and nuances to watch out for? The duration of your confidentiality obligations. If you are the recipient, you want these to be shorter years and vice versa if you are the discloser.
Make sure if you are disclosing any trade secrets that the NDA obligates the recipient to keep it confidential and not use the trade secrets indefinitely , which generally means until such trade secret enters the public domain.
The purpose and use of the confidential information. License Key means a software licensing management and security tool or other device that Licensor uses to allow Licensee access to the Program s and which may have an expiration date. Intellectual Property License means any license, permit, authorization, approval, contract or consent granted, issued by or with any Person relating to the use of Intellectual Property. Federal Food, Drug, and Cosmetics Act, as amended, and the regulations promulgated thereunder, and any corresponding foreign or domestic marketing authorization application, registration or certification, necessary or reasonably useful to market a Collaboration Product in the Territory, but not including pricing and reimbursement approvals.
Business License means a license issued by the Department to a medical marijuana dispensary, grower, processor, testing laboratory, or transporter. A business method, a manner of conducting business or a way of doing business, is also a protectable trade secret.
Examples include a system for analyzing mortgage rates or a process for instructing employees. Designs for products, machines, and structures, or other manufacturing specifications, can be protected as trade secrets. Examples include the design for a photo-processing machine, the blueprint for a casino or specifications for a paint roller.
Other formulas that could be protected as trade secrets include pharmaceutical, chemical and cosmetic compounds. Physical devices such as machines, devices or objects can be subject to trade secret protection.
Usually, trade secret protection is lost once the device is made public, but protection may enable you to protect it before obtaining a patent or while attempting to sell or license the product. Computer software is commonly protected under trade secret law because the underlying software code is not readily ascertainable or generally known.
A computer program often qualifies for trade secret status during its development and testing stage. It may also qualify for protection under copyright or patent law. Companies are often very eager to protect their customer lists with NDAs, particularly when a former employee might use a customer list to contact clients. If a dispute over a customer list ends up in court, a judge generally considers the following elements to decide whether or not a customer list qualifies as a trade secret:.
Customer List — Example 1 : A salesman worked for an insurance company selling credit life insurance to automobile dealers. When he switched jobs to work for a competing insurance company he took his customer list and contacted the customers at his new job. A court ruled that the customer list was not a trade secret because the names of the automobile dealers were easily ascertainable by other means and because the salesman had contributed to the creation of the list.
Lincoln Towers Ins. Agency v. Farrell, 99 Ill. Customer List — Example 2 : Former employees took the client list of a temporary employment service. The former employees argued that the list could not be a trade secret since the information could be obtained through other means.
Courtesy Temporary Serv. Camacho, Cal. Retailers are usually easy to identify through trade directories and other sources, and a list of them ordinarily does not confer a competitive advantage. But there are exceptions—for instance, a list of bookstores that order certain types of technical books and pay their bills promptly may be very valuable to a wholesale book distributor.
But if the information is readily ascertainable through trade publications or other industry sources, it is not classified as a trade secret. In other words, the information was easy to ascertain. Shilling, Cal. A database—information of any type organized in a manner to facilitate its retrieval—is often protected as a trade secret. For example, a court ruled that a database for inventorying and cost economies on wholesale sandwich production for fast-food retailers was a protectable trade secret.
One Stop Deli, Inc. P 70, W. A collection of data that is readily ascertainable, however, is not a trade secret. Databases may also be protected under copyright law if the method of compiling or arranging the data is sufficiently creative. Know-how does not always refer to secret information. Sometimes it means a particular kind of technical knowledge that may not be confidential but that is needed to accomplish a task.
Although know-how is a combination of secret and nonsecret information, we suggest that you treat it as a protectable trade secret. If you disclose know-how to employees or contractors, use a nondisclosure agreement. Cease and Desist — A letter from the owner of a trade secret or copyright, patent or trademark that requests that alleged illegal activity is stopped immediately.
Clean Room — A method of developing proprietary material in which an isolated development team is monitored. Common Law — A system of legal rules derived from the precedents and principles established by court decisions.
Copyright — The legal right to exclude others, for a limited time, from copying, selling, performing, displaying or making derivative versions of a work of authorship such as a writing, music or artwork. Database — Information of any type organized in a manner to facilitate its retrieval. Declaratory Relief — An order from a court sorting out the rights and legal obligations of the parties in the midst of an actual controversy. Economic Espionage Act — A law making it a federal crime to steal a trade secret or to receive or possess trade secret information knowing that it is stolen.
Evaluation Agreement — A contract in which one party promises to submit an idea and the other party promises to evaluate it. After the evaluation, the evaluator will either enter into an agreement to exploit the idea or promise not to use or disclose the idea. Fiduciary Relationship — When one person stands in a special relationship of trust, confidence or responsibility to another.
Generally Known — Information is generally known if it has been published or publicly displayed or is commonly used within an industry. Improper Means — The illegal acquisition of trade secrets through theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy or espionage through electronic or other means.
Injunction — A court order requiring that a party halt a particular activity. A court can issue an injunction at the end of a trial a permanent injunction or immediately, rather than wait for a trial a preliminary injunction. The manufacturing process for biological products is also more complicated, due to genetic variability in the source material.
Because of this, it is critical that BLAs contain a thorough description of product development and relevant manufacturing procedures, as well as all steps taken to ensure that the final biological product performs consistently across batches.
While BLAs and NDAs serve the same purpose of gaining approval to market a drug in the United States, they differ slightly in terms of their application content and submission requirements. Regarding approval criteria, NDAs must fulfill three conditions:.
Similarly, contents of a BLA should establish that the biological product is safe and potent; however, because biological products are processed from living material, BLA content must also demonstrate purity specifically in terms of showing that the final product does not contain extraneous material. Due to the complexities of manufacturing biological products, a pre-license inspection of the facility is generally required before a BLA is approved.
Pre-approval inspections sometimes also take place during an NDA review, but are typically conducted based on risk assessment by the Agency.
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