7 key terms to draft a confidentiality agreement

In an era of rapid technological advancements and global business collaborations, safeguarding intellectual property has become paramount. Our dedicated legal team has been diligently advising clients on the intricacies of drafting confidential agreements, a crucial step in fortifying defenses against intellectual property theft. With a particular focus on shielding newly acquired patents from potential breaches and unauthorized use, our legal experts are committed to ensuring that clients navigate the complex landscape of confidentiality agreements with clarity and confidence. As businesses strive to innovate, our team stands as a steadfast ally, providing strategic counsel to protect their invaluable creations and proprietary information.

Here are 7 key terms to consider when drafting a confidentiality agreement with a Chinese manufacturing partner.

1. Binding Nature

   Ensure clarity regarding whether the confidentiality agreement is unilaterally binding to one party or mutually binding to all parties involved. This is the starting point of the agreement.

2. Scope of Confidential Information

   Managing the scope of confidential information can be a potential source of conflict for both parties. As the Discloser, there may be a desire to expand the scope, while the Recipient may wish to do the opposite.

   2.1 Specificity to Transaction

      Clearly define what constitutes “confidential information,” specifying its relevance to the particular transaction.

   2.2 Marking Protocol

      If you are the Recipient, establish a protocol for marking confidential information with terms such as “Secret,” “Confidential,” “Private,” or similar identifiers.

3. Obligations of Confidence

   The obligation of confidence doesn’t solely rest on the Recipient. If the Recipient is a group company, clarify that the party is responsible for any breach by its affiliates or representatives.

4. Return or Destruction

Upon the written request of the disclosing party, the receiving party must promptly and diligently destroy all confidential information within its possession or control.

 5. Ownership Rights

Specify that all rights, titles, and interests related to the confidential information remain with the disclosing party.

6. Governing Laws & Dispute Resolution

Clearly state the governing laws that will apply to the agreement and outline a dispute resolution mechanism to handle any conflicts or disagreements.

7. Remedies

Outline the available remedies in case of a breach, including options such as monetary damages, specific performance, and injunctive relief.

By focusing on these key terms, we hope that we can provide valuable insights for businesses engaging in agreements with Chinese manufacturing partners, emphasizing the importance of clear, comprehensive, and mutually beneficial confidentiality agreements.

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