Advisory Case on Concluding a Non-Disclosure Agreement for Product Development Collaboration

1. The Client's Situation

Company A, a small and medium-sized enterprise holding materials and raw-material technology, was about to embark on a joint product development project with large corporation B and needed to share technical data. However, during the initial discussions, the draft NDA provided defined the scope of confidential information unclearly and was inadequate in its provisions on information protection after the contract's termination, raising concerns that the company's core technology could be leaked externally. Accordingly, Company A wished to pursue the collaboration while thoroughly protecting its own rights and information, and requested legal advice from Your Legal Team to systematically refine the contract.

After analyzing the structure of the existing NDA draft, Your Legal Team developed practical responses focused on provisions that were unfavorable or incomplete from Company A's standpoint. We set the definition of confidential information broadly and clearly, limited the purpose of use to performance of the contractual task, and specified the obligation to obtain prior written consent and conclude a separate agreement before providing information to third parties. In particular, we adjusted the terms so that the confidentiality obligation would continue for a certain period even after the contract's termination, and inserted provisions on the receiving party's management responsibility for its officers and employees within the organization and on securing documented pledges, thereby strengthening the level of control. We also additionally reflected requirements for damages, return obligations, and injunctive relief so that the counterparty would bear substantive legal liability in the event of improper use of confidential information.

On the premise of secure protection of confidential information, the client was able to reliably proceed with the collaboration with the large corporation and put in place a system for proactively addressing information protection risks. Furthermore, through this advice, the client secured a standardized NDA that can be repeatedly used in technology-based collaborations, thereby also building an internal legal system capable of responding quickly and stably to similar business opportunities in the future. Beyond the substantive strengthening of the contract terms, this was significant in that it established preventive measures against the possibility of future disputes.