1. The Client's Situation
Our client needed to execute a Non-Disclosure Agreement (NDA) in order to discuss a joint research and development project with a large corporation. However, the draft agreement defined the scope of confidential information excessively broadly, and was structured so that excessive restrictions would continue even after the expiration of the contract term. In addition, numerous unfavorable elements were found regarding the method of marking confidential information, obligations to manage departing employees, and penalty (liquidated damages) provisions, raising concerns about unnecessary legal risks going forward.
2. Your Legal Team's Advice
Your Legal Team thoroughly reviewed the NDA draft, clarified the definition of confidential information, and amended it to strengthen exceptions such as publicly available information and independently developed information. We required that a "Confidential" marking always be applied when confidential information is provided, and clarified the procedure for after-the-fact notice, thereby enhancing the company's defensibility. We also realistically adjusted the obligations to manage departing employees, pointed out the excessiveness of the penalty clause, and reasonably limited the scope of damages. Furthermore, we proposed a negotiation direction to reasonably shorten the post-termination confidentiality period.
3. Result
The final NDA reflecting our advice achieved a balanced adjustment of the parties' obligations and rights, allowing the client to reduce unnecessary liability burdens and safely protect its core technology. At the same time, the client was able to secure a confidentiality obligation at a practically enforceable level while maintaining a relationship of trust with its partner.