Smarter Growth Matters
Protect Trade Secrets with non-disclosure Agreement
It happens often and all to quickly: An unwitting product manager, sales executive or techie from one company wants to strike a deal with another to meet a certain technological or business need. The conversation between the two companies opens casually, all in the spirit of information exchange and establishing goodwill between the participants.
During the conversation proprietary information from each company is made known to the other. Soon after the discussion, one of the companies uses the sensitive information from the other company for its own gain.
If a rock-solid non-disclosure agreement (NDA) had been signed before the parties started exchanging their valuable corporate information, the situation just described could not occur. It is imperative that the parties involved in sensitive intra-company discussions understand the importance of the NDA so that the disclosure of proprietary or sensitive information is undertaken with all eyes open.
Restrictions on subsequent disclosures of valuable information usually have to be established because gag orders don’t help much after facts have already been disclosed.
An NDA should never be regarded as “just a boilerplate.” Once the parties involved have executed an NDA agreement, each party will be bound to terms and conditions, as agreed upon. After the agreement has been signed and after the disclosures have been made, the opportunity for feigning innocence or ignorance of knowledge has been long lost. Once the NDA is in place, an injured party might seek — and obtain—injunctive relief from further disclosures. In effect, it is a cease-and-desist order from the court.
Essential considerations for an NDA include the following:
- All the “right” people engaged in the interaction with the external parties have to be protected. This inclusion should span all employees and partners who will be exposed to any valuable information divulged by any party at the table. This inclusion should also extend to attorneys, financial experts and other consultants who might be engaged in the process of developing and finalizing the deal.
- The scope of the agreement should be carefully and clearly delineated. If a conversation is to occur relevant to confidential information about specific technologies offered for license, the scope of the discussion should be specifically defined.
For example, if an entity decides that it wishes to limit its discussion with a vendor to its storage area network technology improvements, and it does not wish to discuss the support in its base operating system for such improvements, the NDA should specifically limit the scope of a potential discussion. Of course, it is best if all the parties participating in the discussion realize the limits of the agreement as they go forward.
- If possible, it is best to document the specific subject matter of discussion as well, even at a modular level. For example, the NDA would cover discussions pursuant to “ the replacement of Company 1’s software modules X, Y and Z with Company e’s software modules A, B and C, including compatibility and interoperability issues with customer applications.”
- It is important for all sides to be reasonable about the time period covered by the NDA. All industries have their own internal time clocks for determining whether information has remained valuable or has become stale. Ten years is a good rule of thumb in the software business, but such assumptions should not be made at the bleeding edge of technology or industry.
There can be additional important matters for consideration, exploration and inclusion in the NDA. These can include parties’ obligations after the term of the agreement, the permitted, purposes for disclosure of confidential information, the discloser’s obligations and the recipient’s level of the duty of care in regard to the protection of the confidential information, and more. All issues presented in an NDA should be viewed as critical.
In terms of simplifying the documentation of the process, as well as the process itself, the simplest way is to daft a master NDA. It provides a simple yet detailed means of keeping a complex conversation moving forward.
The master NDA can cover all the elements of an ongoing relationship among the parties involved. It can enable the inclusion of “bolt-on” legal attachments to accommodate each phase of ongoing sensitive or proprietary discussions between or among companies without renegotiating the entire relationship. The scope and content of every discussion, however, would be clearly documented.
Denise LaGase is a lawyer who has more than 20 years of expertise in developing NDAs for technology companies and more than 30 years working with companies in the technology sector.
Did you know that cat litter has been used for about 70 years, and that it now represents a $2B industry?
One day in 1947, Mrs. Draper of Cassopolis, Michigan, asked her neighbor, Edward Lowe, if he had some sand that she could use for her cats. Her sand pile was frozen, so she had been using ashes, but her cats were tracking it all over her house. Mr. Lowe gave her a material that he had on hand for use in his garage and workshop, called Fuller’s Earth, which was comprised of clay and minerals that could absorb liquid spills. Mrs. Draper loved the clay material, because it worked so much more effectively than did sand or ashes.
In that same year, Mr. Lowe decided to sell the clay material in 5 lb. bags, which he called “Kitty Litter.” He offered it to local Michigan pet store for 69 cents per 5 lb. bag, but the pet store owner turned him down, because it would never sell! The pet store owner gave the clay bags away until customers were willing to pay for them, after Mr. Lowe had demonstrated his product at a great number of cat shows. This product let to the founding of Edward Lowe Industries, which created the “Tidy Cat” brand and a very valuable (for Mr. Lowe, expensive for you and me) industry.
The downside is that the clay material is not necessarily bio-degradable, and for those of us who have indoor feline companions, we are filling our landfills with kitty-concrete. So, an antidote to kitty litter might make for a great startup opportunity…just sayin’!
FGD Client Highlights
For more than 20 years, ITSMA has led the way in defining, building, and inspiring B2B marketing excellence. With a dedicated focus on services and solutions for the connected economy, we provide our member community with insight, advice, and hands-on help to strengthen reputation, increase revenue, and deepen customer relationships. In 2003, ITSMA pioneered the concept of account-based marketing and now we’ve written the book on it—A Practitioner’s Guide to Account-Based Marketing: Accelerating Growth in Strategic Accounts. Learn more at www.itsma.com.
Women to Watch in Science & Tech 2017
Furman Gregory Deptula would like to congratulate our client, Barbara White-Corbus Pharmaceuticals Holdings, Inc. as one of ten award recipient’s of The Boston Business Journal’s 2017 Women to Watch in Science and Technology. The award recognizes New England’s female technology and business leaders; the innovators who are helping to build new companies and drive established tech companies in new directions.
Everyday Investors Can Now Buy Stock in Pioneering Wearable Medical Robotics Company
Cambridge, Mass. (March 15, 2017) – Myomo, Inc., a commercial stage medical robotics Company, today announced a Regulation A+ initial public offering that allows any investor the opportunity to invest in the Company’s vision for expanded mobility for those suffering from neurological disorders and upper limb paralysis. Myomo’s non-invasive technology, exclusively licensed from Massachusetts Institute of Technology, restores a patient’s ability to use their partially paralyzed or weakened arms and hands again so that they can return to work, live independently and reduce their cost of care. Myomo is seeking to become the first Company to launch a Regulation A+ IPO with listing on the New York Stock Exchange MKT (NYSE MKT). TriPoint Global Equities, LLC, working with its online division BANQ® (www.banq.co), will act as the lead managing selling agent and bookrunner for the offering. Myomo intends to use the proceeds from the offering to fund sales and marketing, product development, repayment of debt, and for working capital and other general corporate purposes. “We are very excited to share our vision of restoring upper limb mobility to millions of Americans and others worldwide with a broad set of individual investors that now have the opportunity to invest in our Company, alongside accredited investors and institutions, to acquire shares at the initial offering price,” said Paul R. Gudonis, CEO of Myomo. “While a traditional public offering is generally reserved for large institutions and the Wall Street elite to invest at this stage, we are taking advantage of new SEC regulations to level the playing field for all investors to participate concurrently in our IPO.” “I am thrilled that Myomo is planning to become the first Company to ever bring a Regulation A+ offering to the NYSE MKT,” said Mark Elenowitz, CEO of TriPoint. “It has been 84 years since the Securities Act of 1933 was enacted, but with the Title IV of the Jumpstart Our Business Startups (JOBS) Act, Myomo leads us into exciting new territory where Main Street meets Wall Street.”
Attorney Bernard Posner
Q. How long have you been practicing law?
A. It’s been 14 years…since 2003.
Q. What is the area in which you are most interested?
A. I went to law school at Boston College, and just really loved moot court. So, I was thrilled to earn a clerkship at the Trial Court in Massachusetts. This experience made me undaunted by any courtroom! After that, I was hired by the City of Boston, and had the opportunity to do civil jury cases, so I’ve ended up with both public and private litigation experience. I felt very fortunate, since most young attorneys don’t have opportunities for exposure to some very complex jury cases.
Q. What drives you now?
A. Well, to best serve my clients, I like involvement with their issues as early as possible. I serve as a partner to my clients, more than an occasional purveyor of legal advice. To avoid litigation, especially for some of my clients on the healthcare side, I’ve been able to be part of their strategic planning. There are so many lawyers around who are fully capable of doing legal work, but the development of a solid, interactive relationship with the client is most important to me. This approach is particularly important for smaller business, where litigation at any stage is already too expensive.
Q. What do you do for fun and relaxation?
A. My hobbies are skiing and biking, depending on the season. On the ski team, I raced for the University of Albany while in college. These days our 6 year old and our 20-month old keep my wife, Kara, who is also an attorney, and me plenty busy!
FGD Law actively supports quality of life endeavors within the communities our colleagues live and work. The annual Biddeford-Saco ArtWalk is a favorite of all our team. The downtown group ‘Heart of Biddeford’ and other volunteers have grown it into an ongoing monthly event – taking place on the last Friday of each month, from April to October. Please join us this month as we will be featuring the work of Adeline Goldminc-Tronzo on April 28th.
Over the past 35 years, she has frequently exhibited her work across the US and Europe. Her work is held in numerous private collections both here and abroad. She currently lives and works in Eliot, Maine with her husband the painter Michael Tronzo.