Smit & Van Wyk Patent, Trademark & Registered Designs

Non-disclosure Agreement and Loss of IP Rights

Intellectual Property Insights

A Non-Disclosure Agreement (NDA) can be used to avoid the “gentleman’s agreement” dilemma, by legally binding a participant to not disclose/divulge/release the confidential information shared with them. In the event of a breach of this agreement, the party in fault will be held liable on the basis of a breach of contract. Should your confidential information be disclosed to a third party and the third party uses that information, it will be up to you to prove the link between the third party and the other signing party.

Whatever the nature of your business, whether it is a small or large entity, or if you are planning to begin something in your personal capacity, the excitement and enthusiasm of a new and inventive idea is contagious.  You might think it’s now or never, and that the market is ready or desperately in need of your invention, and this may be your only chance.  However, the disclosure of your new idea should take a back seat when it comes to the commercialisation thereof.  Before you disclose your idea to anyone, you should take a second to take the necessary precautions to protect that idea.

A disclosure of an invention, even if this is done within the walls of a small boardroom with possible collaborating companies or investors, can lead to a serious loss of rights. For example, a patent application cannot be filed for the idea if it has been made available to the public beforehand.

A Non-Disclosure Agreement (NDA) can be used to avoid the “gentleman’s agreement” dilemma, by legally binding a participant to not disclose/divulge/release the confidential information shared with them. In the event of a breach of this agreement, the party in fault will be held liable on the basis of a breach of contract. Should your confidential information be disclosed to a third party and the third party uses that information, it will be up to you to prove the link between the third party and the other signing party.

In this sense, although the protection afforded by an NDA is limited as opposed to registered intellectual property rights (e.g. patents, designs, etc.), it is often the only means of protecting an idea whilst seeking funding or collaborators.  If possible, however, registered rights would be preferable due to the ease of enforcement of such rights against third parties.   We thus advise that you get your NDA in writing before any confidential information is shared, so all parties understand what their respective duties and privileges are going forward.  Smit & Van Wyk can provide a suitable NDA on request.

Posted on 19 May 2021
Home / Intellectual Property Insights / Non-disclosure Agreement and Loss of IP Rights

More Articles

CIPC File Transfer Notice

CIPC File Transfer Notice

Companies and Intellectual Property Commission (CIPC) File Transfer Notice The South African CIPC has commenced with the second stage of the large-scale file transition to a new bulk storage...

Privacy rights in South Africa: Data And Cloud

Privacy rights in South Africa: Data And Cloud

Looking at privacy rights in South Africa with the arrival of the Fourth Industrial Revolution (4IR) we stand at the verge of a technological revolution, characterised by the digitalisation of...

Copyright

Copyright does NOT have to be registered in South Africa. Unlike patents, trade marks or registered designs, copyright vests in the author of a work once the work is created in a material form. Examples of copyright include: Literary works (eg. novels, poems, textbooks, letters, reports, lectures, speeches), musical works, artistic creations (eg. paintings, sculptures, drawings, photographs), cinematograph films, sound recordings, broadcasts, published editions of books and computer programs.
Read more about Copyright Infringement.

Patent Registration, Patent an Invention, Patent Attorneys, Patent Law
Trademark Registration, Trademark Attorneys, Brand Protection
Registered Designs, Design Patents, Industrial Designs
Copyright Law - Copyright Attorneys - Music Copyright