Confidentiality Agreements/Non-Disclosure Agreements by Shraddha Pandit

This is a PPT on basics of drafting of Confidentiality Agreements/Non-Disclosure Agreements. It is useful for students of BA.LLB, BBA.LLB, LLB, BAF. Teachers can use it to teach the topic. Use lecture method of classroom pedagogy.
Students should refer to textbooks and reference books for in-depth study.

1. ADV. SHRADDHA PANDIT BA, LLB, LLM, SET, Diploma in German, Post Graduate Diploma in IPR, AIBE, Pursuing Ph.D. in Law Confidentiality Agreements / Non-Disclosure Agreements © ADV. SHRADDHA PANDIT 2024 1

2. SOME BASIC RULES Keep mobile phones away, unless you are asked to check some provision of law (that includes laptops, tablets, etc.) You need not take screenshots of the slides as I will be sharing them after completing the portion/topics You need to refer to a variety of resources that are Bare Acts, reference books, research papers, etc. and not just these PPTs. You have to interact in the class to know more. Let us not just GO through the syllabus, but GROW through the syllabus! © ADV. SHRADDHA PANDIT 2024 2

3. CONFIDENTIALITY AGREEMENTS / NON-DISCLOSURE AGREEMENT Introduction A Confidentiality Agreement is a legal document between two parties that prevents the release of information, ideas, transaction details, and more to third parties. It’s common for businesses to use these agreements during interactions with potential purchasers, clients, or hires to ensure confidential or proprietary information isn’t released or misused to the detriment of the owner. The document formalises relationships between parties and guides behaviour and use of the information. It also acts as evidence of an agreement in court upon the release of confidential information. A Confidentiality Agreement is also known as the following: Non-disclosure agreement (NDA) Proprietary information agreement Secrecy agreement © ADV. SHRADDHA PANDIT 2024 3

4. Meaning, Purpose & Types Between employer and employee in Corporates Non disclosure agreement (NDA) is entered into between the Employer (the owner of the Confidential Information) and the Employee (the receiver of the Confidential Information) with respect to the protection of confidential information/ documents, received by employee during the tenure of his/ her employment with the Company, from sharing without prior permission of Employer. NDA is a legal contract between two parties that outline the Confidential Information shared by the Parties but restrict the access to the other third party. For a business to grow, it is utmost important to keep certain information intact within its organisation . Therefore, employer needs to ensure that the confidential information is not passed on to any person without his permission, which may otherwise create hindrance in the growth and success of its business. © ADV. SHRADDHA PANDIT 2024 4

5. © ADV. SHRADDHA PANDIT 2024 5

6. Between hotel owner and chef in food business Every business has some secrets which need to be protected including but not limited to Client lists / user/ consumer information, Intellectual Property Rights, Trade secrets (including secret recipes in case of food business), photographs, videos, images, pdfs, ppts, software, hardware, disks, etc. © ADV. SHRADDHA PANDIT 2024 6

7. © ADV. SHRADDHA PANDIT 2024 7

8. Between Lawyers/CAs/doctors/hospitals and their interns/associates/ apprentices/ clerks It becomes imperative for any Lawyer/ CA to keep his or client’s details confidential even when teaching his or her associates/apprentices/ clerks or sharing / delegating any work to them. Also, the doctors or hospitals are required to get NDAs signed from their interns / trainee doctors during their training as data of patients need to be kept safe from leaks. © ADV. SHRADDHA PANDIT 2024 8

9. Benefits The NDAs also require the employees to return all tools, implements, laptops, files, stationary, office space used by him to her during training/ employment back to the employer on termination or cessation of employment. Therefore, NDAs ensure safe and perpetual business without fear of data leaks and intrusions from competitors. This helps businesses to expand without hindrances. Thus, businesses, companies, law and CA firms can continue to do business and maintain their strategic positions at the marketplace. © ADV. SHRADDHA PANDIT 2024 9

10. © ADV. SHRADDHA PANDIT 2024 10 Remember: In India, there is a legislation to regulate t rade secrets. But, in India there isn’t a written law. Uniform Trade Secrets Act ("UTSA") is a piece of legislation that defines trade secrets and describes claims related to trade secrets. To date, 47 states and the District of Columbia have adopted the UTSA. The UTSA provided for several potential  remedies  for wrongs committed under the act, including  injunctive relief ,  damages , and  attorney's fees .

11. Controversies and lack of legislations: No legislation governing Trade Secrets in India Protection by way of Contracts – Damages for Breach of Contracts Recognition of legal rights in Trade Secrets by courts of law invoking the equitable jurisdiction – unclear as yet. Past cases show attempts to combine causes of action with violation of statutory IPRs Criminal Breach of trust under S.406 of IPC, 1860: “Whoever commits a criminal breach of trust shall be punished with imprisonment of either description for a term which may extend to three years, or with fine, or with both. ” Other statutes such as the IT Act, 2000 is relied on. © ADV. SHRADDHA PANDIT 2024 11

12. Case law: In cases such as Burlington Home Shopping v. Rajnish Chibber 61(1995)DLT6, the defendant was a former employee of the company who utilized the plaintiff company’s contacts database in a similar business started by him after leaving the company. The Hon’ble HC of Delhi protected the plaintiff company under law relating to trademarks and confidential information and held that contacts database was developed through the skill and labour by the plaintiff company. © ADV. SHRADDHA PANDIT 2024 12

13. Constitutionality All essentials of a valid contract are also applicable for an NDA. Signing an NDA is not violative of Constitutional provisions namely Article 19(1)(g) that includes the Right to Freedom of Occupation, Trade and Business © ADV. SHRADDHA PANDIT 2024 13

14. FURTHER READING! List of books to refer (you can find more detailed notes and model drafts in these books as well): Nondisclosure Agreements: Protect Your Trade Secrets and More: The plain-English legal information & forms you need to safeguard your business interests by  Richard Stim &  Stephen Fishman Drafting, Pleading and Conveyancing by Dr. S. R. Myneni, Asia Law House, Hyderabad Lectures on Drafting, Pleading and Conveyancing by Dr. Rega Surya Rao, Asia Law House, Hyderabad Drafting, Pleading, Conveyancing & Professional Ethics By Noshirvan H. Jhabvala, C. Jamnadas & Co., Mumbai © ADV. SHRADDHA PANDIT 2024 14

15. Acknowledgements Firstly, I would thank my family for its constant support. I would also love to thank PGCL for giving me this wonderful opportunity. Last, but not the least, I would thank all my wonderful students for making this session a huge success! All the best! © ADV. SHRADDHA PANDIT 2024 15

16. CONNECT TO ME ON THESE! Linkedin : www.linkedin.com/in/shraddha-pandit-1267591a6 ORCID ID: https://orcid.org/0009-0008-3669-5883 Lawteachers.in: https://law-teachers.in/law-teachers-details.php?id=392 RESEARCHGATE: https://www.researchgate.net/profile/Shraddha-Pandit-8 © ADV. SHRADDHA PANDIT 2024 16