The Secrets of Non-Disclosure Agreements

Non-disclosure agreements are an important part of working with industry. As a researcher at U-M, you should be familiar with what they protect and how they are managed.

1. Why, when and how to work with OTT and ORSP Ed Pagani, PhD Tony Nielsen, JD July 30, 2014 Secrets of Non -Disclosure Agreements: © Office of Research and Sponsored Projects 2014

2. What is a Non-Disclosure Agreement? © Office of Research and Sponsored Projects 2014 A Non-Disclosure Agreement (an “NDA”) ... is a formal agreement (legal contract) p rovides for the exchange and treatment of confidential information should be signed prior to exchanging information obligates the receiving party to keep secrets should identify which information is confidential is sometimes called a “Confidentiality Agreement” (CDA) or a “Proprietary Information Agreement” (PIA)

3. Examples of Information that may be Considered Confidential © Office of Research and Sponsored Projects 2014 Data, chemical structures, drawings, an idea yet to be disclosed to the public For publication, or not, in a journal, student dissertation, patent application, etc. Unpublished patent application Provisional patent application, unpublished non-provisional patent application Software code, algorithms Other Customer lists, manufacturing processes, price lists

4. What is a Non-Disclosure Provision? © Office of Research and Sponsored Projects 2014 A Non-Disclosure provision may be found in other types of agreements (e.g., research, licensing, material transfer, consulting, etc.) and contains many of the same elements of an NDA.

5. When do I need an NDA? (and when do I need something else?) © Office of Research and Sponsored Projects 2014 NDAs are used when you will... participate in preliminary discussions prior to sponsored activity and/or potential licensing of U-M technology. You may need something else when you will… receive software, a dataset, or money conduct research perform testing provide consulting be doing something outside your role as a U-M employee

6. Is an NDA always Required? © Office of Research and Sponsored Projects 2014 The short answer is, not always . OTT and ORSP do not require that an NDA be signed when: you and a third party exchange information that is in the public domain OTT or ORSP determines that there is no need for UM information not in the public domain to be held in confidence The long answer is, yes, when … the party giving you/U-M information requires an NDA we/U-M are mutually exchanging confidential information or sending confidential information to an outside entity

7. Common Elements of an NDA © Office of Research and Sponsored Projects 2014 Party names (e.g. Acme Corp. and U-M agree to…) Purpose of why the parties want to enter into the NDA Definition of what information must be kept confidential Oral vs. written disclosures Obligations to keep that information confidential Permitted exceptions to those obligations Ownership of the confidential information Term (time period) of the obligation to keep information confidential Retaining copies of confidential information Miscellaneous legal provisions (e.g. governing law, jurisdiction, resolving disputes, export controls, etc.)

8. Is there more than one type of NDA? © Office of Research and Sponsored Projects 2014 Yes…there is a one-way and a two-way NDA. A “one-way” NDA (to cover information coming in U-M, or information going out of U-M) is used when a party agrees to disclose or accept confidential information with another party. For example, when Acme Corp. wants to disclose secret nuclear reactor designs with Dr. U-M Professor, for the purpose of starting a discussion on a potential research collaboration between the parties. For OTT or ORSP’s Sample Standard One-Way NDA, go to: http://orsp.umich.edu/policies/um/downloads/Standard One-Way NDA.pdf

9. Is there more than one type of NDA? © Office of Research and Sponsored Projects 2014 A “two-way” NDA is used when two or more parties mutually agree to share their respective confidential information with each other. For example, when Acme Corp. wants to send technical specifications to Dr. UM Professor, and Dr. UM Professor wants to send her unpublished designs to Acme Corp. *** Note: if a UM employee intends to share confidential or proprietary information with an outside entity (an “outgoing” NDA), they should work with the U-M Office of Technology Transfer (TechTransfer). ***

10. What if a company asks me to send them an NDA ? (Part 1 of 2) © Office of Research and Sponsored Projects 2014 First , determine whether you plan to send out confidential information (outgoing one-way NDA), or will be required to mutually share confidential information (two-way NDA) with the company. If yes, work with Office of Tech Transfer . If the company simply wants to share the company’s confidential information with you (incoming one-way NDA), then… refer them to ORSP’s website, at: http://orsp.umich.edu/policies/um/ nondisclosure.html

11. What if a company asks me to send them an NDA ? (Part 2 of 2) download OTT or ORSP’s standard one -way CDA, at: http://orsp.umich.edu/policies/um/nondisclosure.html © Office of Research and Sponsored Projects 2014

12. How does OTT and ORSP Manage requests for NDAs ? © Office of Research and Sponsored Projects 2014 r eviews the underlying purpose of the NDA, and the characteristics of the information to be disclosed reviews the Unfunded Agreement (UFA) record in eRPM , to ensure compliance with U-M policies (e.g. Conflict of Interest, etc.); reviews the legal language of the NDA , to ensure compliance with U-M policies and state and federal laws (e.g. Freedom of Information Act, Confidential Research Investment and Information Act, etc.); negotiates acceptable language for the NDA , when appropriate and necessary; and signs the NDA to legally bind the University.

13. Signing authority for NDAs. © Office of Research and Sponsored Projects 2014 Principal Investigators? No! ORSP? Yes. TechTransfer? Yes . Per U-M Standard Practice Guide (SPG) 601.24, only authorized staff are permitted to legally bind UM in an agreement (e.g. an NDA). For more information, see: http://spg.umich.edu/policy/601.24 *** Note: NDAs involving U-M personnel acting within the scope of their employment must be signed by an authorized U-M official. ***

14. How do I involve ORSP ? © Office of Research and Sponsored Projects 2014 If an outside entity sends you an NDA (or, they sign UM’s one -way NDA “as-is”), then you or your research administrator should route the partially executed NDA to ORSP through the eResearch Proposal Management system (aka “eRPM” ) . The NDA must be routed as an UFA through eRPM (not as a “Proposal Approval Form” aka “PAF”). New!

15. How do I involve OTT? © Office of Research and Sponsored Projects 2014 Non -disclosure Agreements (NDAs) are often used to protect the confidentiality of an invention as it is being evaluated by potential licensees. NDAs also protect proprietary information of third parties that University researchers need to review in order to conduct research or evaluate research opportunities. U-M Tech Transfer enters into NDAs for University proprietary information shared with someone outside of the University or two-way NDAs to enable both partners to share confidential information. OTT does not use e-Research and UFAs to process requests for NDAs, directly contact your OTT representative or OTT.

16. When to contact OTT or ORSP FOR AN NDA © Office of Research and Sponsored Projects 2014 CONTACT OTT One-way NDA to protect outgoing U-M confidential information Two-way NDA to protect outgoing U-M and incoming third party confidential information CONTACT ORSP THROUGH e-RESEARCH (UFA) One-way NDA to cover incoming third party confidential information

17. How do I use eRPM for an NDA? © Office of Research and Sponsored Projects 2014 For more information, tips, and training on how to route an NDA/UFA through the eRPM system, go to: eRPM Training and Reference Materials page: http://www.umich.edu/~eresinfo/erpm/training.html Use the eRPM UFA Quick Reference Card for PI/Project Teams

18. Additional Resources © Office of Research and Sponsored Projects 2014 For information generally about NDAs in the University research setting, see the University Industry Demonstration Partnership (UIDP) Contract Accords for University Industry Sponsored Agreements , “ Contract Accord 9: Confidential Disclosure Agreements ,” available at: http://sites.nationalacademies.org/PGA/cs/groups/pgasite/ documents/webpage/pga_073004.pdf For U-M-specific information about NDAs related to research, consult ORSP’s website: http://orsp.umich.edu/policies/um/nondisclosure.html

19. Questions? © Office of Research and Sponsored Projects 2014 Contact your OTT or ORSP Project Representative: See the staff listings and organization chart http://orsp.umich.edu/ about http ://www.techtransfer.umich.edu/about/staff.php Contact the ORSP Training Manager: Amanda Coulter Wolverine Tower, First Floor, 1016 3003 South State St. Ann Arbor, MI 48109-1274 e-mail [email protected] Phone Number: [phone] Fax: [phone]

20. Case Studies © Office of Research and Sponsored Projects 2014 Grant agency informs you that your grant application will not be published, but the reviewers are not required to sign an NDA. Journal board informs you that the manuscript you submitted for review will publish no sooner that 3 months, and the reviewers are not required to sign an NDA. A third party wants a copy of your provisional patent application but is unwilling to sign an NDA. UM and an engineering firm signs a two-way NDA for the parties to discuss a braking system for a subway train . The conversation switches to a braking system for a jet airplane. Under a one-way NDA, you disclose confidential information to a third party on the design of an electronic part for a mobile phone. Three years later, you discover that your design, claimed in a UM pending patent application, was disclosed in a poster presentation by a former employee of the third party to the NDA.