One way that business owners and corporations protect their intellectual property is through the use of non-disclosure agreements (NDAs). Employees may be asked to sign these as part of their contract when they onboard with the business. This ensures that even though the employee may need to read or use confidential information, they are prohibited from sharing it with an outside source.
For example, an employee may sign an NDA when starting work at a tech company. In the course of their employment, they may write or view code that is proprietary to the company’s operations. If they later leave the business to join a competitor or start their own company, they are still prohibited from using or sharing that code. This is just one example, as NDAs can be used across various industries.
NDAs have varying terms
How long the employee must abide by the NDA depends on how it was written. Some NDAs have expiration dates and are known as terminating non-disclosure agreements. Others, referred to as non-terminating non-disclosure agreements, do not expire. The terms are determined at the time the employee signs the agreement.
For instance, an employee working on a creative project may sign an NDA that lasts only a few years. After that, the project will have been released, eliminating the need for confidentiality. However, an employee who learns the technical specifications of a new invention may be bound by a non-terminating NDA that lasts for the rest of their life. It is essential to read contracts carefully and understand all the legal aspects involved.
In some cases, disputes may arise. At that time, all parties need to understand their legal options.