Confidentiality agreement: Difference between revisions

Latest revision as of 19:43, 21 November 2023

NDA Anatomy™

JC’s guide to non-standard confidentiality agreements.
For the OneNDA, see the OneNDA Anatomy

Do you promise not to tell, and if you do, do you acknowledge damages may not be an adequate remedy?

Resources: Confidentiality agreement \| Confi — Led Zeppelin style \| GDPR \| Copyright vs. confidence \| OneNDA \| Common terms \| Certification \| Confidential information \| Confidentiality obligation \| Derived information \| Disclosed information \| Discloser \| Exclusivity \| Indemnity \| No licence \| Non-solicitation \| Permitted disclosees \| Permitted disclosures \| Procure compliance \| Purpose \| Receiver \| Remedies \| Reps and warranties \| Return of information \| Term of confidentiality \| Index: Click ᐅ to expand: Confidentiality OneNDA

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confidentiality agreement
/ˌkɒnfɪdɛnʃɪˈæləti/ /əˈgriːmənt/ (n.)

(Also known, to those for whom the glass is half-empty, as a “non-disclosure agreement”, or an “NDA”. Or a “confi”.)

1. (Forensic evolution) The ostentatious courtship display of a fecund legal eagle. Identified as a kind of Darwinian textual selection because the length and gravity of the terms of a non-disclosure agreement varies in exact inverse proportion to its subject matter. The more fatuous the “confidential information”, the more stentorian in term and baroque in expression the NDA tends to be. Thus, a legal department whose plumage boasts an enormous multicolored NDA is broadcasting to the rest of the market, “look how fertile I am! I can insist on this transparently idiotic legal contract and people still sign it! It is absurd along every conceivable dimension, yet, here I still am, my business in rude health!”

2. (Reg tech) Any class of legal contract sufficiently common, homogenous, predictable and dull that a machine-learning proof of concept will appear to work, in some superficial way, for a period of time at least as long as the general counsel’s attention span. (So named because the confidentiality agreement is the only such contract in wide use). Hence: “Hi I would like to pitch you my new software as a service offering, which can intelligently automate your entire legal operations platform. It runs on chatbots and natural language processing and/or a room full of captive economic migrants in Khazakstan. It rocks. I can give you a half-hour demo. So I can set up the POC, can you send me a few sample...”
“Let me guess: a few sample confidentiality agreements?”
“Oh right. I see. Hey look sorry, I have to hop.”

The NDA space race

The trajectory of “NDA as legaltech exemplar” bears a striking similarity with the space race.

Firstly, competitors in this stampede towards the singularity all talk a great game about their magical technology (machine learning, neural networks, general AI etc) when in fact it is runs from a call-centre full of Bulgarian school-leavers equipped with slide rules, compasses, protractors and pencils (if lucky) and vacuum cleaner nozzles, duck tape, tin foil and string (if not). In fairness, there is general intelligence involved; it’s just not artificial: it belongs to the school-leavers).

Secondly, virulent conspiracy theories circulate in underground networks if legal eagles which doubt whether there was ever any technology involved at all, theorising instead that the whole idea of a confidentiality agreement is just an elaborate hoax.

Thirdly, allowing for a moment it did work, this moon-shot cost a hell of a lot of time and money and was a huge distraction for a what was a dry, lifeless, inert, joyless and ultimately fairly pointless journey. It is as if the Eagle triumphantly landed on Planet NDA, they took selfies, horsed around for a bit with a space buggy and some golf clubs, collected some pumice and came home. Suddenly it’s 60 years lateral, no one’s been back to Planet NDA since, let alone colonised the rest of the galaxy.

What should be in an NDA

Let’s be blunt about this: there is a special place in hell for any advisor who serves up a confidentiality agreement more than 3 pages long. Even three pages is purgatorially tedious. GET TO THE POINT. It’s a goddamn NDA, not the sale of your soul.

For those of you who can’t see your way clear to embracing the OneNDA, and who have not yet been asked to get your coat, here are the basic things it needs to cover: Who is who: Who is disclosing, who is receiving, or is it mutual? Mutual is good — as it plays to the idea that this is fair, but sometimes you want to just get across the line quickly, by offering confidentiality, without requiring it. That way, for example, you can just sign without seeking assent.

The confidential information: What counts as confidential information, and what doesn’t?
The Purpose: Why are you disclosing the confidential information? What is the project?
The confidentiality obligation itself: How is the receiver expected to keep it secret? Who can the receiver share with? On what terms?
Mandatory disclosure beyond the “Purpose”: What about compulsory disclosure under legal process, statutes and regulations?
Term: How long does the confidentiality obligation last?
Other: Representations and warranties, governing law, And for God’s sake WHATEVER YOU DO DON’T FORGET THE COUNTERPARTS CLAUSE.

What shouldn’t be in an NDA

The following often make their way into a confi agreement, though none really have any business being there.

The OneNDA

Nowadays there is a market standard commercial non-disclosure called the OneNDA. It solves a lot of problems, does away with much of the small-minded drizzling that tends to go with NDA negotiation, and really removes much of the need for this page. The JC was fairly heavily involved with its production so I’m kind of biased, but it’s pretty neat.

References

@@ Line 1: / Line 1: @@
-{{a|confi|}}
+{{a|confi|
-Also known, to those for whom the glass is half-empty, as a [[non-disclosure agreement]]. An agreement whereby you promise not to tell. If Robert Plant were writing one, he would write it like the box on the right.
+{{image|Secret|jpg|Do you promise not to tell, and if you do, do you acknowledge damages may not be an adequate remedy?}}
+}}{{d|confidentiality agreement|/ˌkɒnfɪdɛnʃɪˈæləti/ /əˈgriːmənt/|n|}}
-Anyhoo. Here are the main parts of a normal financial markets confidentiality agreement.<ref>If you are a Harvey Weinstein type who expects to turpitudinously, to hush up people you have triggered, I’m afraid you have come to the wrong place. this is about the good kind of [[NDA]].</ref>
+(Also known, to those for whom the glass is half-empty, as a “[[non-disclosure agreement]]”, or an “[[NDA]]”. Or a “[[confi]]”.) <br>
-===What’s in a [[confi]]?===
+. (''Forensic evolution'') The ostentatious courtship display of a fecund [[legal eagle]]. Identified as a kind of Darwinian [[textual selection]] because the length and gravity of the terms of a [[non-disclosure agreement]] varies in exact inverse proportion to its subject matter. The more fatuous the “confidential information”, the more stentorian in term and baroque in expression the NDA tends to be. Thus, a [[legal department]] whose plumage boasts an enormous multicolored [[NDA]] is broadcasting to the rest of the market, “look how fertile I am! I can insist on this transparently idiotic legal contract and people still sign it! It is absurd along every conceivable dimension, yet, here I still am, my business in rude health!” <br>
-Confis can be “one way”, where one party discloses and the other receives, or “two way”, where both parties disclose sensitive information. A [[broker]]’s template will tend to be far more generous when it is receiving only, than when it is giving information up. I know this may come as a shock to some of you.
-====Length====
-Firstly, let’s be blunt about this: there is a special place in hell for [[Mediocre lawyer|any advisor]] who serves up a confidentiality agreement more than 3 pages long. Even three pages is purgatorially tedious. GET TO THE POINT. It’s a goddamn [[confi]], not the sale of your soul. Oh hang on.
-{{confi purpose}}
-{{confidential information}}
-{{confi obligation}}
-{{regulator requests}}
-{{return of information}}
-====Possibility of injunctions====
-Some people like to acknowledge that the potential consequences of breach of confidence are so severe that ordinary contractual damages might not be adequate and [[equitable]] relief might be the only means of protecting your position. Injunctions, dawn raids and so on. Whatever floats your boat. Really an acknowledgment so that the poor wronged person who goes to the [[courts of chancery]] seeking injunctive relief can point to M'lud and say, “You see, your honour? That rascal knew perfectly well I might need an injunction here.”
-Like I say, whatever floats your boat.
+. (''[[Reg tech]]'') Any class of legal contract sufficiently common, homogenous, predictable and dull that a machine-learning proof of concept will appear to work, in some superficial way, for a period of time at least as long as the [[general counsel]]’s attention span. (So named because the [[confidentiality agreement]] is the only such contract in wide use).  Hence: “Hi I would like to pitch you my new [[software as a service]] offering, which can intelligently automate your entire legal operations platform. It runs on [[chatbot]]s and [[Natural language processing|natural language processing]] [[and/or]] a room full of captive economic migrants in Khazakstan. It rocks. I can give you a half-hour demo. So I can set up the POC, can you send me a few sample...” <br>
-====No [[representations]] or [[warranties]]====
+“Let me guess: a few sample [[confidentiality agreement]]s?” <br>
-Another one for the “[[I never said it was]]” file, a clear [[disclaimer]] that when giving you this information, I never said it was accurate or good for anything. so you can’t sue me if you rely on it and lose money.
+“Oh right. I see. Hey look sorry, [[I have to hop]].” <br>
+===The NDA space race===
+The trajectory of “NDA as [[legaltech]] exemplar” bears a striking similarity with the space race.
-====Term====
+Firstly, competitors in this stampede towards the [[singularity]] all talk a great game about their magical technology ([[machine learning]], [[neural network]]s, [[general AI]] etc) when in fact it is runs from a call-centre full of Bulgarian school-leavers equipped with slide rules, compasses, protractors and pencils (if lucky) and vacuum cleaner nozzles, duck tape, tin foil and string (if not). In fairness, there ''is'' general intelligence involved; it’s just not ''artificial'': it belongs to the school-leavers).
-Some folks will insist on a hard stop, say two years, after which supplied information ceases to be confidential. [[Inhouse lawyer|Inhouse lawyers]] may profess themselves to be immutably bound to have such a term by internal [[policy]]]]. While the commercial value of much information does go stale over time (blueprints fo a BetaMax, anyone?), this isn’t universally true — a client list is valuable however long you hold it — and the usual justification for the hard stop (“we don't have the systems to indefinitely hold infoirmation subject to confidence and don't want indeterminate liability for breach”) is a canard. Whatever information security systems you do have don’t suddenly stop working after three years. And as for indeterminate liability — well, [[no harm no foul]]: if the information really is stale then no loss follows from a breach, right? No loss, no damages.
-===What a confi shouldn't have===
+Secondly, virulent conspiracy theories circulate in underground networks if legal eagles which doubt whether there was ever any technology involved at all, theorising instead that the whole idea of a confidentiality agreement is just an elaborate hoax.
-The following often make their way into a confi agreement, though none really have any business being there.
-*An [[Exclusivity clause]]
-*A [[Mon-solicitation clause]]
-*An [[indemnity]]
+Thirdly, allowing for a moment it did work, this moon-shot cost a hell of a lot of time and money and was a huge distraction for a what was a dry, lifeless, inert, joyless and ultimately fairly pointless journey. It is as if the Eagle triumphantly landed on Planet NDA, they took selfies, horsed around for a bit with a space buggy and some golf clubs, collected some pumice and came home. Suddenly it’s 60 years lateral, no one’s been back to Planet NDA since, let alone colonised the rest of the galaxy.
-===Special AKA===
-The same as a:
-*[[Non-disclosure agreement]]
-*[[NDA]]
-*[[Confi]]
-==See also==
+{{confi basic structure}}
+==The [[OneNDA]]==
+Nowadays there is a market standard commercial non-disclosure called the [[OneNDA]]. It solves a lot of problems, does away with much of the small-minded drizzling that tends to go with NDA negotiation, and really removes much of the need for this page. The JC was fairly heavily involved with its production so I’m kind of biased, but it’s pretty neat.
+{{sa}}
+*[[Copyright and AI]]
 *[[Confidence]]
-*[[Confidentiality Agreement - Rock 'n' Roll Style]]
+*[[Copyright]]
+*[[Patent]]
 {{ref}}