Is your virtual filing cabinet overflowing with documents you painstakingly created (or paid a lawyer to create), signed, and then promptly… 

Filed away forever? 

If it is, you’re in good company. 

Even business owners who realize the importance of legal documents are guilty of doing this.  

Because once you get something like a non-disclosure agreement (NDA) signed, it’s easy to go, “Job handled. I don’t need to think about that again.” 

But as great as the temptation is, I urge you to keep thinking about it. 

Using your NDA the right way is key to protecting your brand. 

**Real quick before we jump in: 

Everything I share is legal education and information. It’s not business, financial, or legal advice, and it doesn’t create an attorney-client relationship between us.*

Understand your NDA

Whether you worked with a lawyer to draft an NDA or you used an attorney-drafted template, the first step (as with any legal document) is to make sure you thoroughly understand it. 

Most people know when they’re asked to sign something they should interpret what it says before they put pen to paper. 

But the same is just as important when you ask someone else to sign one for you. 

(You’d be surprised how many people don’t know what their own contracts mean.) 

The purpose of an NDA is to protect your intellectual property and business by ensuring anything you disclose to someone else about your business remains yours. 

(Which means you want to use this type of document any time you outsource.) 

It also outlines potential legal ramifications if the agreement is broken or violated in some way. 

Key Provisions to create a legally enforceable NDA include:

– An outline of the parties involved 

– Definition of confidential information (CI) and what’s not considered confidential

– Use of CI restrictions

– Applicable governing law, regulations, and remedies

– The term the NDA covers (and what would trigger the NDA to end before the full term)

– Effective dates and signature blocks

Understanding what your NDA covers is only the first step in using it to protect your brand.

Actively manage your NDA

Here’s the catch: 

Your proprietary information is only protected if you take the steps outlined in that NDA. 

Simply getting the NDA signed by all involved parties and then filing it away to be lost in the endless jumble of documents on your laptop isn’t enough. 

I suggest creating a checklist of actions outlined in your NDA that you can keep on hand. 

Include actions such as:

– Providing written notices of what counts as CI

– Marking documents as confidential

– Using secure cloud storage and encryption

– Using verbal reminders at the beginning of meetings that CI is subject to your NDA

– Including a confidentiality disclaimer in emails containing sensitive information

– Limiting access to digital files with password protection and user permissions

 And then make sure to follow through on these action items. 

For example 

After a Zoom meeting where CI is disclosed, you might want to send a written summary of the discussion specifying what should be treated as confidential. 

You can even create a template for these types of notices that includes sections for meeting dates, participants, topics discussed, and confidential items to stay consistent and thorough.

Balance what you share with what you protect

When you enter into a non-disclosure agreement, think about what you want to “give away.” 

Consider how long the terms of your NDA are and whether you want to hand over the “keys to the kingdom” if your NDA protection only lasts for a year, for instance. 

Here are a few things considerations to help you strike that balance: 

  1. Assess how critical each piece of information is

Classify your information based on sensitivity, such as public, internal use, confidential, and highly confidential. 

Then, figure out the minimum amount of information you would need to share to achieve whatever outcomes you need based on the collaboration or business transaction. 

  1. Disclose information in smaller doses

You might want to share information in phases based on project progress or the length of the working relationship. 

Start with less sensitive information and share more CI only as necessary. 

  1. Communicate clearly

Provide explicit instructions for how to handle and mark CI. Use labels, headers, and footers to clearly identify confidential documents. 

And make sure you have a plan in place for potential breaches. 

Your NDA should clearly outline the legal remedies (such as injunctions or monetary damages) in case of a breach.

Know what to do post-NDA

 All good things must come to an end. 

And that includes your NDA. 

One of the advantages of using an NDA over outdated (and now defunct) documents like non-compete agreements is that NDAs have a defined expiration date. 

But it’s important to note that the expiration may mean the end of any confidentiality obligations you had in place. 

You need to know exactly what terminates when. 

As such, you might want to consider the implications of when an NDA ends and potentially put strategies in place to continue protecting your CI. 

You might decide to renew your NDA before it expires if the relationship/project is ongoing. 

If an extension isn’t an opinion, you can also negotiate new agreements that cover ongoing confidentiality needs or at least outline specific projects that require continued protection.

NDAs Protect your brand

NDAs protect your brand when you understand them and manage them actively.  

You don’t have to overcomplicate it or invest a ton of time and money into it, though.  

As with most contracts, once you have a template for your NDA, you can learn it once, implement it in as many business relationships as you need, and make tweaks to the template as you learn and grow. 

Get help making your template from a contract attorney, or grab your own customizable template from The Legal Shop.

Learn more about protecting your business and handle the legal stuff like a pro.

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