When a company works with a supplier, its own employees, investors, freelancers, and other companies or parties, sensitive information and trade secrets are often shared or disclosed. This exchange can already take place when two parties initiate a contract. However, it is essential for a company to keep information and be treated confidentially by a contractual partner. Therefore, non-disclosure agreements (NDAs) are necessary to ensure the confidentiality of information that is not intended to be made available to the public. Since a non-disclosure agreement is free of any contract, the parties are free to design it at will. Nevertheless, it is advisable to clearly define or define certain points. To learn more about confidentiality agreements or to draft a confidentiality agreement, see below. Once the parties and the nature of the negotiations they are conducting have been identified, the information considered confidential and the commitments to be made to maintain confidentiality, as well as the exceptions that may be applicable, are determined. The parties are required to maintain confidentiality during the negotiation process and also for a subsequent period specified in the contract.
The purpose of this type of agreement is to ensure that the other party does not benefit from the information received or to prevent it from transmitting the above-mentioned information to competitors in the event of failure of the negotiations. A confidentiality agreement (or non-disclosure agreement) is a legal document created between two parties who wish to exchange confidential information with each other, while either party is prohibited by law from disclosing the information to another natural or legal person. The types of confidential information that may be applicable are inventions, trade secrets, new products or manufacturing processes, or other trade secrets or data. The agreement may be unilateral (to prevent either party from disclosing the information) or mutual (although either party may not disclose confidential information obtained from the other party). Non-disclosure or confidentiality agreements are usually signed by the board members of German companies. Confidentiality agreements are generally necessary to protect important business information that only directors and officers of companies have access to. Confidentiality agreements may also contain post-contractual clauses that protect the interests of the company after the conclusion of the cooperation. Confidentiality agreements are often used between companies that plan to do business with each other and understand each other`s processes or data to evaluate and create a business agreement. They are also used in employer-employee relationships where employees must have access to confidential information in the course of their employment, but the employer wants to ensure that the employee does not use or disclose this information for other purposes. Sometimes disclosure of the fact that a non-disclosure agreement exists is prohibited by the agreement. The Purpose of the Trade Secrets Protection Act is to prevent the acquisition, use or disclosure of trade secrets by unauthorized persons.
In this context, certain prohibited acts are defined that may constitute an unlawful acquisition, use or disclosure of a trade secret. In particular, according to the Trade Secrets Act, a trade secret cannot be obtained by: The impetus for the Trade Secrets Act came from European Union Directive 2016/943, a directive on the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure. The Directive aims to harmonise the protection of trade secrets in Europe; it had to be transposed into national law by 9 June 2018. Where the Directive has not yet been transposed, as in Germany, individuals may, to a certain extent, rely on the Directive itself and argue that existing national law must be interpreted in such a way as to comply with the Directive. Substantial new rules, as noted above (need for appropriate measures to protect confidentiality; admissibility of reverse engineering; Liability even in the absence of wrongful action) result from the Directive itself; Therefore, these new rules are potentially relevant for all transactions currently carried out in Germany, given that 9 June 2018 was the date on which the deadline for transposing the Directive into German law expired. German companies can also include confidentiality clauses in their employees` employment contracts. The Non-Disclosure Agreement (NDA) is a contract. It serves to protect confidential information. The Parties declare that they will treat and keep the information to be disclosed and made available as a result of their cooperation in a confidential manner. Since the exchange of internal and sensitive information is already possible when the contract is initiated, NDAs are often created and signed before a company negotiates a contract with its business partners.
There are two possible types of non-disclosure agreements, the bilateral agreement and the unilateral agreement. While the two-page non-disclosure agreement requires two parties to maintain secrecy, the unilateral non-disclosure agreement orders only one party to keep the information confidential. Whether the bilateral or unilateral agreement is more appropriate depends on your business plan. We will be happy to advise you in this regard. Please contact our law firm today via the online form below for more information about non-disclosure agreements in Germany. .