Confidentiality agreements, also known as non-disclosure agreements (NDAs), are used at the outset of discussions involving a business arrangement. This is to safeguard IP before confidential information is shared. These agreements serve to safeguard a startup’s intellectual property (IP) before confidential information is shared.
Startups need to protect their intellectual property. In many cases, the only business advantage startups have is a better way of doing something. Often a method cannot be patented and even if it could be, the time and expense required is outweighed by the need to immediately deliver the product or service to the market.
For some startups, typically biotechnology companies, a great deal of time and money is invested in developing a particular procedure or set of procedures to accomplish a specific goal.
Since the process itself cannot be copyrighted (and likely not be patented) it is usually kept secret until, and sometimes after, the product is on the market. This type of know-how is potentially licensable.
MaRS has created two sample templates of a confidentiality agreement in the case of a proposed asset purchase transaction. These templates are intended to help streamline business for investors, founders and their respective legal advisors. One template is a short-form version of an NDA agreement and one template is in a longer, letter form. While MaRS makes these documents available for educational purposes and to facilitate the negotiation of terms between investors and startups, the templates are yours to use at your own risk. Please see the disclaimer below.
Disclaimer
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