A non-disclosure agreement as being the term suggests is surely an agreement from the disclosing party and receiving party. In other words, two parties with an agreement such as this one, are persons who’ll exchange confidential information. This confidential information may be anything from data secret to some product prototype. While non-disclosure agreements are fantastic to have, these are hard to enforce. This because, the knowledge that is being exchanged is frequently not subject material of patent or copyright. Therefore, as you move the disclosing party discloses such information with a receiving party, it’s always challenging to imply ownership in the said information. Even when disclosed, it’s difficult to prove the disclosure in letter and spirit.
In addition towards the above, in recent times, non-disclosure agreements are executed, in great frequency, by and between employers and incoming employees. This practice might be more evident in i . t companies. Such agreements can be part of an authority employment agreement or executed separately. Either way is correct. A typical employee non-disclosure clause is reproduced hereunder for viewer’s reference:
1. CONFIDENTIALITY
1.1 Employee acknowledges that throughout Employee’s employment by Company, Employee is going to be exposed to valuable confidential and trade secret information of Company. Employee agrees to help remedy all such information as confidential also to take all necessary precautions against disclosure of those information to third parties during and following your term with this Agreement. Employee acknowledges that trade secrets with the Company will contain but will ‘t be necessarily restricted to:
a) Technical information: methods, processes, formulae, compositions, systems, techniques, inventions, machines, software and research projects.
b) Business information: customer lists, pricing data, options for supply, financial data and marketing, production, or merchandising systems or plans.
1.2 Employee knows that this Agreement will not and will not prevent him/her from doing work for any other Company subsequent on the termination of his/her employment with all the Company as long since the Employee won’t use or disclose such confidential and proprietary information.
2. USE
2.1 Employee shall not use Company’s confidential and trade secret information, except on the extent needed to provide services or goods requested by Company.
3. OWNERSHIP
3.1 Employee agrees that developments made and works manufactured by Employee or under Employee’s direction in association with Company assignments should be the sole and take care of property of Company, that all copyrights and also other proprietary interests therein shall fit in with Company, knowning that the other provisions in this Agreement shall fully apply to these developments and works.
Such agreements in India, whether they may be signed between a member of staff and employer, client and service provider or perhaps between two parties, one being disclosing party and another being receiving party, is going to be governed by provisions on the India Contract Act, 1872. As mentioned above, non-disclosure agreements are essential to execute in lots of situations, like protecting intellectual property of the employer from employees, specifically employer promises to apply for a patent. Non-disclosure agreements became very important in light of India’s burgeoning outsourcing industry. In India a very agreement should be executed using a valid stamp paper of appropriate value just to be enforceable in the courtroom.