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WHAT DO CDAS NEED TO COVER? The briefest form of Confidential Disclosure Agreements – which is fine for basic market research purposes – needs to describe the Who, What, Where, When and Why of the disclosure WHO The agreement must contain your name and address (and your company name if registered) and the name and address of the person you are about to consult.
If you’re consulting them as a representative of their company, you should fill in their company details as well: Company Name, registered office, ACN number and the person’s position in the company.
If dealing with a company, there are likely to be other people involved … the marketing staff, the Research & Development engineers, other senior managers. You should specify that the person signing the agreement is personally responsible on behalf of their company for ensuring that any other staff or contractors becoming involved in the project will sign an identical agreement before being told the confidential information.
If you wish to exert even more control, you might insist that the signatory inform you before passing on confidential information to fellow employees or contractors, and seek your approval for each new person to be involved.
But if you’re just doing some initial basic market research – say in a local shopping centre or at a Trade Show – all you generally need is a name and home address.  WHAT
The agreement must include a description of the actual confidential information … exactly what it is that is secret, and must be kept confidential?
You might describe it fairly vaguely, for example as “An improved bricklayer’s trowel” or you might go into more detail “A bricklayer’s trowel with built-in gauging for mortar-bed thickness”.
You should also define what it is you are showing them or telling them: eg was the confidential information contained in a description, an artist’s impression, sketches, engineering drawings, viewing of a prototype, testing of a prototype, a CD-ROM, a video etc.
If you are leaving confidential information with people, or e-mailing or posting it to them, or sending them prototypes for evaluation, you should make some rules about what they may or may not do with the information … i.e. not copy it or re-produce it, not e-mail or forward it to anyone, not discuss it with anyone outside their organisation.
You should also cover the return of the information, and whether they should destroy it, or send it all back to you within seven days of a written request, or whether they can keep it for their own records.
You should also specify that the disclosure of the confidential information to the recipient in no way confers any rights of ownership over the information divulged. WHERE It’s a good idea to note the location of the consultation – especially when using a CDA for market research purposes. It’s also useful if you’re dealing with a large company with branches and offices all over the world. WHEN It is important that you date the agreement with the date that it is signed – usually the date on which you disclose the idea.
Then you have two options. You can remain silent on any expiry of the agreement, or you can set a time limit on when it expires. If you remain silent on an expiry time, there is a chance that the CDA can be held to be unenforceable as an improper restraint of trade. A typical period is two-to-five years.
For example, you might be convinced that you’ll either have patented your idea, or will have dropped it, within say two years. Putting a ceiling on how long the person is burdened with the secrecy of the information is generally helpful in making them feel more comfortable about signing it. WHY This is an important issue which is sometimes left off CDAs, but which will be important if the document is ever scrutinised by a court of law.
You must specify why you are consulting the signatory. Was it for: - Market research as a potential consumer;
- Market research as a potential retailer or distributor;
- Evaluation as a potential licensee;
- Patent searching or patent applications;
- Help with designing components;
- Help and quotations for manufacturing components
- Input with tool-making or manufacturing processes;
- Development of a prototype;
- Testing of a prototype; and/or
- Standards approval etc
AN EXAMPLE So, in its most basic form, a CDA for a bricklayer’s trowel could be as simple as this:
This Agreement is made between the Inventor, John Smith, of 123 Home Street, Hometown, NSW, 2999, and the Recipient, (Insert their full name and address).
The Recipient agrees to maintain as strictly Confidential the Information disclosed on the (insert date of disclosure).
The Confidential Information relates to “an improved bricklayer’s trowel with automatic mortar depth gauging” and comprises a full description, demonstration of a prototype, and an opportunity to test the prototype.
The Confidential Information is provided to the Recipient at the building site at the rear of 99 Station Street, Newtown, for the purposes of basic market research and market testing, and no rights in the Confidential Information are thereby conferred on the Recipient.
The information shall be held as Confidential for two years, or until it comes into the public domain other than through breach of this agreement by the Recipient.
Signed: (Both parties to sign, and print their names underneath)
Witnessed: (It’s a good idea to have the signatures witnessed, and print the name and contact details of the witness.) source: http://www.tritonfoundation.org.au/
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