Non-Disclosure Agreement ( NDA ) Attorney — Austin, Texas
Before sharing your invention with anyone — an investor, manufacturer, or business partner — a properly drafted NDA protects your confidential information, preserves your international patent rights, and creates a clear legal record that the disclosure was made in confidence, integrated with your overall patent filing strategy.
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NDA Fundamentals — What They Do and What They Don't
A non-disclosure agreement creates a contractual obligation of confidentiality — the party receiving confidential information agrees not to disclose it to others and not to use it for purposes beyond those authorized by the agreement. What an NDA does not do is transfer ownership of the disclosed information, prevent the recipient from independently developing the same information, or protect information that is already in the public domain. Understanding these boundaries is essential for deploying NDAs as part of an effective IP protection strategy rather than treating them as a blanket solution to all confidentiality concerns.
The enforceability of an NDA depends on several factors that well-drafted agreements address specifically. The confidential information must be clearly defined — sufficiently broad to cover all relevant disclosures but not so broad as to be unenforceable as covering everything the parties discuss. The obligations imposed on the recipient must be reasonable in scope — courts will not enforce perpetual obligations to maintain confidentiality of information that is readily available through legitimate means. The exceptions to confidentiality — for information already known to the recipient, independently developed without reference to the disclosed information, received from a third party without restriction, or required to be disclosed by law — must be accurately stated without creating loopholes that swallow the confidentiality obligation.
For technology companies in Austin's innovation ecosystem, NDA execution is a routine pre-condition to virtually every commercial conversation involving proprietary technology — from investor pitches and partnership discussions to supplier negotiations and employment interviews with candidates who might be exposed to trade secrets. The routine nature of NDA execution in commercial settings creates a risk that agreements are signed without adequate attention to their terms — a risk that produces consequences when confidentiality obligations need to be enforced and the agreement proves inadequately drafted for the specific dispute.
NDA Strategy in the Context of Patent Filing
The strategic relationship between NDA execution and patent filing is one of the most practically important intersections in IP law — and one that most NDA-focused discussions underemphasize. An NDA that is executed before a confidential disclosure preserves the confidential nature of the disclosed information for patent purposes — maintaining the disclosure as a confidential communication rather than a public disclosure that could start the one-year US grace period running or permanently destroy international patent rights.
The one-year US grace period allows inventors to file a US patent application within 12 months of any public disclosure of their invention — but this grace period does not protect international patent rights in most jurisdictions outside the US. A disclosure made under a properly executed NDA is not a public disclosure — it does not start any clock running and does not affect patent rights in any jurisdiction. A disclosure made without an NDA — or under an inadequate NDA that fails to impose genuine confidentiality obligations — may be treated as a public disclosure that permanently eliminates international patent rights even if a US patent application is later filed within the one-year grace period.
I draft NDAs for technology company clients with patent filing timing explicitly in mind — structuring the confidentiality provisions to clearly establish that covered disclosures are confidential, maintaining that characterization in the face of subsequent events that might otherwise be characterized as public disclosure, and coordinating NDA execution with patent filing strategy to ensure that confidential commercial discussions do not inadvertently compromise patent rights. For startups that regularly pitch to investors before filing patent applications, the NDA-patent filing timing relationship is particularly important and requires explicit attention in both the NDA drafting and the overall IP strategy.
Mutual vs. One-Way NDAs — Negotiating the Right Structure
The negotiation of whether an NDA should be one-way or mutual is often the first substantive IP negotiation a startup encounters — and how it is handled signals the sophistication of the startup's IP approach to potential partners and investors. Understanding the business and legal implications of each structure, and knowing when to accept mutual terms and when to insist on one-way terms, is part of effective IP commercial strategy.
A one-way NDA imposes confidentiality obligations only on the receiving party — appropriate when information flows predominantly in one direction, as in most inventor-to-manufacturer or startup-to-investor disclosures where the startup is sharing its proprietary technology and the other party is not sharing confidential information in return. Many sophisticated technology companies and institutional investors reflexively request mutual NDAs even in one-way disclosure situations, either as a matter of policy or as a negotiating posture. Understanding when to accept the mutual structure — because it is commercially inconsequential — and when to resist it — because the mutual structure creates obligations that the company does not want to assume or that complicate the IP ownership analysis — is a strategic judgment that benefits from legal counsel.
From a patent strategy perspective, one-way NDAs in inventor-to-potential-partner disclosure situations are preferable because they unambiguously characterize the inventor's disclosure as a confidential communication protected by the NDA without creating any reciprocal obligations that might complicate the inventor's ability to use information subsequently received from the partner. Mutual NDAs in these situations can create confusion about whether subsequent innovations by the inventor were developed independently or with reference to the partner's confidential information — a confusion that can complicate patent ownership analysis and inventor credibility in subsequent disputes.
Employee and Contractor NDAs — The Internal Confidentiality Foundation
External NDAs protecting disclosures to third parties are only part of a comprehensive confidentiality strategy. The internal confidentiality foundation — the agreements that bind employees, contractors, consultants, and advisors who have access to the company's confidential technology and business information — is equally important and often receives less systematic attention than external NDA execution.
Proprietary information and invention assignment agreements — sometimes called PIIAs or CIIAs — combine the confidentiality obligations of an NDA with the IP assignment provisions that transfer employee and contractor inventions to the company. For technology companies, the PIIA is the foundational internal IP document — it simultaneously establishes the confidentiality obligations that protect the company's trade secrets during and after the employment relationship and secures the IP assignment that ensures company ownership of innovations made by employees and contractors.
The timing of PIIA execution is critical — it must be obtained before the employee or contractor begins working with confidential company information and before any company-related inventive activity occurs. Attempting to obtain retroactive PIIA execution from employees who are already working — or worse, from former employees who have already left — requires additional consideration to be legally enforceable and creates ownership uncertainty for IP that the retroactive assignment purports to cover. I advise technology companies on PIIA programs — including standard form development, onboarding procedures for timely execution, and retroactive remediation for companies that discover gaps in their existing PIIA coverage.
Trade Show and Conference NDA Strategy
Trade shows, industry conferences, and academic symposia create specific NDA challenges for technology companies — situations where they may simultaneously want to make controlled disclosures to attract customers and partners, protect their innovations from competitor intelligence gathering, and preserve their patent rights. The open environment of most trade show and conference settings makes traditional bilateral NDA execution impractical, requiring a different approach to confidentiality protection.
For demonstrations and disclosures at trade shows where NDA execution is impractical, the recommended approach combines a provisional patent application filed before the trade show — establishing a priority date that protects both US and international patent rights regardless of subsequent disclosures — with identification markings on any materials disclosed at the show as proprietary and confidential. This approach achieves the commercial objective of customer and partner demonstrations while preserving patent rights and establishing a paper trail that the disclosed information was treated as proprietary even in the absence of signed NDAs.
For academic conferences where researchers want to present preliminary results while preserving patent rights, the pre-conference provisional patent filing is essential — not because a presentation at an academic conference is necessarily a commercial disclosure that triggers competitive concerns, but because it is unambiguously a public disclosure that permanently eliminates international patent rights in absolute novelty jurisdictions if made before a patent application is filed. UT Austin researchers and other academic inventors who present at conferences without filing patent applications first regularly discover this limitation after the fact — at which point the international patent rights are irrecoverable. I advise research institution clients and academic spinout companies on the provisional patent filing timing strategy that protects patent rights while enabling academic publication and conference presentation.
NDA Enforcement — When Confidentiality Obligations Are Breached
The enforceability of an NDA is only as meaningful as the remedies available for breach — and those remedies depend on both the quality of the NDA drafting and the strength of the evidence that a breach occurred. Technology companies that maintain comprehensive NDA programs and document their confidentiality practices are in a significantly stronger position to enforce confidentiality obligations than those that execute NDAs routinely without maintaining the practices that make enforcement credible.
The most powerful remedy for NDA breach is preliminary injunctive relief — a court order prohibiting the breaching party from continuing to use or disclose the confidential information while the litigation proceeds. Obtaining a preliminary injunction requires demonstrating likelihood of success on the merits, irreparable harm from continued breach, and balance of equities in the plaintiff's favor. The drafting quality of the NDA directly affects the likelihood of success analysis — agreements with precisely defined confidential information, clear obligations, and appropriate remedies provisions are more likely to support preliminary injunctive relief than vaguely drafted form agreements.
I draft NDAs for high-stakes commercial relationships with enforcement specifically in mind — including provisions that acknowledge the unique nature of confidential information and the inadequacy of monetary damages for breach, that identify specific types of confidential information with the precision needed to support injunctive relief, and that include cooperation obligations for the return or destruction of confidential materials upon request or termination of the relationship. These enforcement-oriented provisions transform the NDA from a commercial courtesy into a legally meaningful protection instrument.
Contact me at (512) 293-0710 or sconnolly@austin-patent-attorney.com to discuss your NDA needs.
[ NDA FAQs — Austin, Texas ]
Question: Do I need an NDA before talking to investors about my invention?
Answer: Yes — always get an NDA signed before disclosing the technical details of your invention to any potential investor, manufacturer, or business partner. Note that many venture capital firms routinely refuse to sign NDAs at the initial pitch stage. In that situation, file at least a provisional patent application before pitching to establish your priority date and preserve your international patent rights before any public disclosure occurs.
Question: What is a mutual NDA versus a one-way NDA and when should an Austin startup insist on mutual confidentiality?
Answer: A one-way NDA protects information flowing in a single direction — typically from the disclosing party to the receiving party — with only the receiving party bound by confidentiality obligations. A mutual NDA binds both parties to confidentiality obligations for information each discloses to the other. Austin startups in early business development conversations should generally insist on mutual NDAs rather than accepting one-way NDAs proposed by larger parties. The practical reason is that in any substantive business development conversation both parties disclose information — the startup discloses its technology and business plans, and the potential partner discloses its commercial requirements, existing technology, and strategic interests — and both parties have legitimate interests in keeping that information confidential. A one-way NDA proposed by a larger counterparty protects only the larger party's information while leaving the startup's more sensitive disclosures contractually unprotected. The push back against mutual NDA requests from large counterparties who claim their standard NDAs are always one-way is a negotiating dynamic I regularly advise Austin startups on — and a mutual NDA is almost always achievable with persistence.
Question: What is an NDA's specific application to discussions with contract manufacturers in Austin's advanced manufacturing ecosystem?
Answer: Austin's advanced manufacturing sector — serving semiconductor, defense, medical device, and clean energy applications — involves frequent technical disclosures to contract manufacturers, component suppliers, and manufacturing process vendors who need detailed technical specifications to perform their manufacturing services. NDA agreements with contract manufacturers require specific attention to several issues that standard technology NDAs sometimes miss. The technical specifications shared for manufacturing purposes typically include information that is both patentable and trade secret — and the NDA should specifically address both categories of protection. Manufacturing NDAs should include specific provisions addressing the manufacturer's obligations to prevent unauthorized access to technical information by their own suppliers and subcontractors. And manufacturing NDAs should address the disposition of tooling, molds, and process-specific equipment that embodies proprietary technical information when the manufacturing relationship ends. I draft manufacturing-specific NDAs that address these issues alongside standard confidentiality provisions.
Question: What is the NDA consideration requirement and is a handshake agreement to keep something confidential legally binding?
Answer: A legally enforceable NDA requires consideration — something of value exchanged between the parties that makes the agreement a binding contract rather than a unilateral promise. For NDAs executed in a commercial context — between parties engaged in business discussions — the mutual exchange of the parties' commitments to confidentiality typically constitutes sufficient consideration even when no money changes hands. A handshake agreement to keep information confidential — without a written agreement — may create some moral obligation but is extremely difficult to enforce because it is nearly impossible to prove the specific terms of an oral confidentiality commitment, when it was made, and what information it covered. The evidentiary value of a written NDA in subsequent litigation — where the specific terms, the date of execution, and the parties' signatures provide clear proof of the confidentiality obligation — is one of the most important reasons to always formalize confidentiality commitments in writing regardless of how simple the underlying business conversation seems.
Question: What is a temporal limitation on an NDA's confidentiality obligation and what duration is appropriate for different types of information?
Answer: NDA confidentiality obligations typically run for a specified term — commonly two to five years — after which the information is no longer protected by the contract even if the receiving party retains it. The appropriate term depends on the type of information being protected. Business information — commercial strategies, customer lists, pricing — may become stale within two to three years and a shorter confidentiality term is commercially reasonable. Technical trade secrets — manufacturing process parameters, proprietary algorithms, specific formulations — may retain commercial value for a decade or more, warranting longer confidentiality terms. True trade secrets are better protected through permanent or indefinite confidentiality obligations rather than time-limited NDA terms — or through separate trade secret protection under the DTSA that is not limited by an NDA's expiration. I advise Austin technology clients to match NDA confidentiality duration to the specific type of information being protected rather than accepting standard two or three year terms for information with longer commercial lifespans. For inventor NDAs specifically, I generally recommend a term of at least three to five years to cover the patent prosecution period and initial commercialization phase.
Answer: Standard NDA exceptions exclude from the confidentiality obligation information that the receiving party independently develops without reference to the disclosing party's confidential information. This exception is commercially necessary — no company can agree to keep confidential information that it might independently develop through its own research and development — but it creates a practical enforcement challenge because proving whether the receiving party's allegedly independent development was truly independent or secretly based on the disclosing party's information is genuinely difficult. Companies that receive confidential information under an NDA and subsequently develop similar technology face potential claims that their development was not truly independent. Protecting against these claims requires proactive documentation of independent development activities — research logs, development notes, and internal communications that predate or run parallel to the NDA disclosure and that establish the independent development's timeline and methodology. I advise receiving parties to implement independent development documentation protocols immediately when entering NDA relationships in competitive technical areas.
Question: What is an NDA exception for information independently developed by the receiving party and how does it work in practice?
Question: What is the difference between a confidentiality agreement and a non-disclosure agreement?
Answer: Confidentiality agreement and non-disclosure agreement are largely synonymous terms referring to the same type of contractual instrument — a contract in which one or both parties agree to keep specified information confidential and not to use it for unauthorized purposes. The terminology varies by industry and jurisdiction — NDA is more commonly used in technology and startup contexts, while confidentiality agreement is more common in professional services and financial transaction contexts. Some practitioners use confidentiality agreement to refer specifically to one-way agreements and non-disclosure agreement to refer to mutual agreements, but this distinction is not consistent across practice. When reviewing any agreement labeled either way, the specific terms of the document govern regardless of what it is called.
Question: Does signing an NDA mean I cannot talk to anyone about the information I received?
Answer: No — standard NDAs include specific exceptions to the confidentiality obligation that allow the recipient to share information with their employees, officers, directors, advisors, and legal and financial counsel who need to know the information and who are themselves bound by confidentiality obligations at least as strict as the NDA's terms. These need-to-know exceptions allow the recipient to conduct the business activities the information is intended to support — evaluating a potential investment, assessing a manufacturing partnership, or negotiating a commercial agreement — without violating the NDA by sharing information with the internal and external advisors the decision-making process requires. The confidentiality obligation prevents disclosure to competitors, the general public, and parties who do not need the information.
Question: What is the difference between an NDA and a letter of intent?
Answer: An NDA establishes confidentiality obligations protecting information shared between parties. A letter of intent — also called a term sheet or memorandum of understanding — establishes the key terms parties have agreed to for a potential transaction, typically before definitive transaction documents are negotiated. The two documents serve entirely different purposes and are often used together — the NDA is signed first to allow confidential due diligence information to be shared, and the letter of intent is signed later when the parties have reached preliminary agreement on transaction terms. A letter of intent may include a confidentiality provision as one of its binding terms, but it is not a substitute for a standalone NDA — the confidentiality obligations in an LOI are typically less comprehensive than a dedicated NDA.
Question: What should I do if someone violates my NDA?
Answer: NDA violations are unfortunately common and responding effectively requires quick action. The first step is documenting the violation — gathering specific evidence of what was disclosed, to whom, and when, compared against what the NDA required to be kept confidential. The next step is assessing the harm — what specific damage has resulted or is likely to result from the unauthorized disclosure. Options for response range from sending a cease and desist letter demanding that the recipient stop using the disclosed information and confirm in writing that no further disclosure has occurred, to seeking emergency injunctive relief from a court if the harm is immediate and irreparable, to filing a breach of contract claim for monetary damages. The speed of response is important — particularly if the unauthorized disclosure might be reaching additional parties who could further disseminate the confidential information.
Question: What is a non-circumvention provision and should it be in my NDA?
Answer: A non-circumvention provision is a clause that prohibits the receiving party from using confidential information to bypass the disclosing party in a business relationship — for example, using information about the disclosing party's supplier relationships to contract directly with those suppliers while cutting out the disclosing party. Non-circumvention provisions are common in technology transfer, business opportunity, and distribution relationship contexts where the disclosing party is concerned that the information recipient might use the disclosed information to replicate the business relationship without the disclosing party's participation. Whether a non-circumvention provision makes sense depends on the specific nature of the confidential information and the business relationship context — I assess whether non-circumvention protection is warranted for each specific NDA engagement.
Question: What is the difference between an NDA's confidentiality obligations and trade secret protection?
Answer: NDA confidentiality obligations are contractual — they bind only the specific parties who signed the agreement and are enforceable through contract remedies including damages and injunctive relief for breach. Trade secret protection is a statutory IP right — enforceable against anyone who misappropriates the protected information through improper means regardless of whether they signed an NDA. The two forms of protection are complementary rather than alternatives. An NDA with a party who receives confidential information creates both a contract-based confidentiality obligation and — when properly maintained alongside other reasonable secrecy measures — helps establish and preserve the trade secret status of the disclosed information. A well-drafted NDA specifically characterizes the disclosed information as trade secrets where appropriate, supporting both contractual and statutory remedies for any unauthorized disclosure or use.
Question: How do I handle an NDA situation where the other party refuses to sign one before a meeting?
Answer: Some large companies — particularly major technology companies and some institutional investors — have policies against signing NDAs before initial meetings. This puts the disclosing party in a difficult position. The pragmatic approach involves several steps: file a provisional patent application before the meeting to establish patent priority regardless of any disclosure; identify in advance what information is truly confidential and essential to disclose versus what is public information that can be shared without NDA protection; prepare a presentation that conveys your core value proposition without disclosing the specific technical innovations that are your crown jewels; and if any confidential disclosure is unavoidable, document the meeting carefully afterward noting what was disclosed and to whom. The combination of provisional patent filing and careful information management is the most reliable protection strategy when an NDA cannot be obtained.
Question: Can an NDA prevent an employee who learns my confidential information from using it at a new employer?
Answer: An NDA with an employee creates an ongoing obligation of confidentiality that survives the employment relationship — even after the employee leaves and begins working for a competitor. The employee cannot disclose or use your confidential information at their new employer without violating the NDA. However, enforcing this obligation against a former employee working for a competitor is practically challenging — it requires demonstrating specifically what confidential information was disclosed or used, which requires evidence of specific misappropriation rather than inference from the fact of the employee's departure to a competitor. The inevitable disclosure doctrine — which some courts have used to prevent an employee from taking a job where they would inevitably use confidential information — is recognized in some jurisdictions but is more limited in Texas, which favors employee mobility. The most reliable protection strategy combines a properly drafted NDA with compartmentalization of access so that departing employees have access to the minimum confidential information necessary for their roles.
Question: What is an NDA's relationship to patent publication and prosecution?
Answer: When a patent application publishes — typically 18 months after the earliest priority date — the disclosed content becomes public information and loses its confidential character. An NDA that was in place to protect information disclosed before the patent application filed continues to protect any information not disclosed in the published patent application. Information that is disclosed in the published application is no longer protectable as confidential once the application publishes — the patent publication is itself a public disclosure that destroys the confidential status of the published content. This distinction between what is in the published patent and what remains confidential — often additional technical details, process parameters, and implementation specifics not included in the application — is an important consideration in managing the transition from NDA-protected confidentiality to patent pending and ultimately published status.
Question: What does "return or destroy" mean in an NDA and how is it implemented?
Answer: Many NDAs include a provision requiring the receiving party to return all copies of confidential information — or certify that all copies have been destroyed — upon the disclosing party's request or upon termination of the agreement. Return or destroy provisions are intended to ensure that confidential information does not persist in the recipient's possession after the NDA relationship ends. Implementing return or destroy in practice involves identifying all copies of confidential information including electronic copies in email, cloud storage, and backup systems, physically returning tangible materials, deleting electronic files, and providing written certification of compliance. In modern digital environments, truly complete destruction of all copies — including backup tapes, email archives, and cloud storage that may be difficult to selectively purge — is often impractical, and NDAs sometimes carve out exceptions for information retained in backup systems that cannot be accessed without extraordinary measures.
Question: What is a residuals clause in an NDA and should I agree to one?
Answer: A residuals clause — sometimes called a residuals exception — is an NDA provision that allows the receiving party to use information retained in the unaided memories of its employees, without reference to notes or copies of the disclosed materials. The practical effect is that an employee who is exposed to confidential information and then independently develops similar technology from memory may not be bound by the NDA's confidentiality obligations for that memory-retained information. Residuals clauses are commonly requested by large technology companies in their standard NDAs. Whether to agree to a residuals clause depends on the nature of your confidential information and the sophistication of the receiving party's employees — the clause is more problematic when the receiving party's engineers are directly relevant to the technology being disclosed.
Question: What is the difference between a non-disclosure agreement and a confidentiality and non-use agreement?
Answer: A standard NDA typically imposes two obligations: a confidentiality obligation — not disclosing the information to unauthorized third parties — and implicitly a non-use obligation derived from the confidentiality obligation. A confidentiality and non-use agreement makes the non-use obligation explicit and typically more expansive — specifically prohibiting the recipient from using the disclosed information for any purpose other than the defined purpose of the disclosure, even in ways that might not technically constitute disclosure to a third party. The non-use provision is particularly important for technology disclosures where the primary risk is not that the recipient will share your information with others but that they will use it internally to compete with you — developing competing products or processes based on your confidential technical disclosure without sharing that information externally. For Austin technology companies sharing proprietary technical information with potential manufacturing partners, development partners, or large corporate prospects, explicit non-use provisions are essential and should be included in every NDA covering substantive technical disclosures.
Question: What is the difference between an NDA and an attorney-client privilege communication?
Answer: An NDA creates a contractual confidentiality obligation — enforceable through breach of contract remedies including damages and injunctive relief — but it does not create attorney-client privilege. Attorney-client privilege is an evidentiary protection that shields confidential communications between an attorney and client from disclosure in legal proceedings — it arises from the attorney-client relationship itself, applies to all confidential communications regardless of topic, and does not expire. When you contact me — whether for a free consultation, prosecution, or any other legal advice — the privilege attaches from the first communication, and everything you share is protected without any NDA required. This is broader than NDA protection in an important way: an NDA can potentially be overridden by court order in litigation, while privilege actively prevents compelled disclosure. For discussions about your invention involving sensitive information you wouldn't want disclosed in potential future litigation, consulting with me first — rather than disclosing to business partners under NDA — maximizes the available legal protections.rather than first disclosing to business partners under NDA — maximizes the available legal protections.
Question: Can an NDA protect information that is publicly available?
Answer: An NDA can only protect information that actually qualifies as confidential at the time of disclosure — publicly available information cannot be made confidential through an NDA. Standard NDA exceptions specifically exclude from the confidentiality obligation information that is in the public domain at the time of disclosure or that subsequently becomes public through means other than the recipient's breach. However, a compilation of publicly available information — organized, analyzed, and presented in a way that provides insights that the underlying public sources do not individually convey — can qualify as confidential even though each underlying data point is publicly available. The compilation itself represents added value that the disclosing party created and that is not publicly available in assembled form. I draft NDA confidential information definitions to capture these compilation and synthesis situations while excluding information that is genuinely in the public domain.
Question: What is a standstill provision in an NDA and when is it used?
Answer: A standstill provision — most common in M&A and investment transaction NDAs — restricts the receiving party from taking certain actions regarding the disclosing party during the NDA term and for a specified period afterward, such as acquiring the disclosing party's stock, soliciting the disclosing party's employees, or pursuing certain competitive activities. Standstill provisions are typically included in NDAs signed in connection with potential acquisition or investment discussions — the potential acquirer or investor receives confidential information about the target company and agrees not to use that information advantage to acquire control through means other than a negotiated transaction. Standstill provisions can significantly restrict a sophisticated party's freedom of action and require careful review before acceptance — a potential investor who signs a standstill may find themselves constrained in ways that affect their overall investment strategy even if the specific transaction under discussion does not proceed.
Question: What is a reverse NDA and when would I use one?
Answer: A reverse NDA is an agreement in which the party that normally receives information — rather than the party that discloses it — is the one protecting the disclosing party's information. In a standard NDA, the information owner imposes confidentiality obligations on the recipient. In a reverse NDA, a large company receiving innovation pitches or unsolicited ideas may offer an NDA that runs in the opposite direction — protecting the information submitter rather than the information recipient. Reverse NDAs are uncommon in commercial practice but occasionally arise when an individual inventor wants some protection before sharing an idea with a larger company that refuses to sign a standard NDA. The practical protection offered by a reverse NDA is limited — the receiving company's standard form terms are typically heavily qualified — but for inventors who cannot obtain any other form of protection before disclosing, a reverse NDA paired with a provisional patent application provides the best available combination of contractual and IP protection.
Question: What is an NDA's relationship to attorney ethics rules when I share attorney-client information with a business partner?
Answer: When you share information with a potential business partner under an NDA — including information that you previously shared with me as your patent attorney under attorney-client privilege — you are potentially waiving attorney-client privilege for the shared information depending on how the disclosure is structured. Attorney-client privilege protects communications between attorney and client from compelled disclosure in litigation — but sharing privileged communications with third parties outside the attorney-client relationship typically waives the privilege for those communications. An NDA with the business partner does not restore or preserve attorney-client privilege for information shared under it. For this reason, I advise clients to be thoughtful about distinguishing between business information that can be shared under NDA protection and attorney-client privileged communications and legal strategies that should remain within the attorney-client relationship rather than being shared with business partners.
Question: How do I draft an NDA that works across international jurisdictions when dealing with foreign partners?
Answer: NDAs used in cross-border transactions involving Austin companies and foreign partners face specific challenges because confidentiality law varies significantly across jurisdictions — what constitutes adequate confidentiality protection, what remedies are available for breach, and how courts enforce foreign NDAs differ country by country. Key considerations for cross-border NDAs include: choice of law provisions specifying which jurisdiction's law governs the agreement — US law, typically Texas or Delaware, is standard for Austin companies even when the other party is foreign; dispute resolution provisions addressing whether disputes will be litigated in US courts or submitted to international arbitration — arbitration with a recognized international body is often preferred for cross-border disputes; export control compliance provisions confirming that the disclosure of technical information complies with applicable export control regulations; and consideration of whether the agreement needs to be executed in multiple languages to be enforceable in the foreign jurisdiction. I draft cross-border NDA provisions with awareness of these international considerations and coordinate with foreign counsel when local law requirements create specific issues.
Question: What is a definitive agreement clause in an NDA and how does it protect both parties?
Answer: A definitive agreement clause — sometimes called a non-binding clause or transaction disclaimer — is an NDA provision clarifying that the NDA itself does not create any obligation for either party to proceed with a transaction, partnership, or commercial arrangement — that only a separately executed definitive agreement would create such obligations. This provision is important because courts in some circumstances have found that preliminary agreements combined with reliance by one party can create binding obligations even without a formal transaction agreement. The definitive agreement clause establishes that the parties are sharing information for evaluation purposes only and that neither party is committed to any transaction absent a separately executed definitive agreement. For Austin startup founders sharing information with potential acquirers, investors, or commercial partners under NDA, the definitive agreement clause ensures that the information sharing conversation does not inadvertently create legally binding commitments before both parties are ready to formalize any arrangement.
Question: What special NDA considerations apply when sharing information with a potential co-founder?
Answer: Pre-co-founder NDA situations — sharing your startup idea with someone you are considering bringing on as a co-founder — require careful thought because the standard NDA framework may not capture everything that matters in this specific context. A potential co-founder NDA should address confidentiality of the disclosed technical and business information, non-use of the disclosed information for independent competing development, specific restrictions on sharing the information with third parties including the potential co-founder's current employer, what happens to the disclosed information if the co-founder relationship does not proceed, and importantly — whether any early-stage collaborative discussions create any IP ownership claims. The last point is particularly sensitive: if the potential co-founder contributes genuine technical input to your innovation concept during the evaluation period, they may have an inventorship or ownership claim regardless of the NDA. I draft potential co-founder NDAs with specific provisions addressing the IP implications of pre-formation collaboration and ensuring that any inventive contributions made during the evaluation period are properly addressed in the documentation. It should also specifically restrict the prospective co-founder from sharing the disclosed information with third parties, including their current employer.
[ Related Services ]
Clients protecting confidential information often also work with me on:
[Trade Secret Protection] · [IP Assignment Agreements] · [IP Agreements & Contracts] · [Provisional Patent Applications] · [Startup IP Strategy]
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Non-Disclosure Agreement (NDA) Services
Before you share your invention with anyone — an investor, potential manufacturer, business partner, or employee — a properly drafted NDA is essential for protecting your confidential information and preserving your patent rights.
I offer a free 30-minute consultation to discuss your disclosure situation, assess the appropriate type and scope of confidentiality agreement, and explain how an NDA fits into your broader patent strategy.
I draft NDAs with your patent filing timeline and international patent rights in mind — ensuring that the confidentiality protections work together with your patent strategy rather than creating gaps in your IP protection. I also review and negotiate NDAs presented to you by other parties to ensure the terms adequately protect your interests.
Call or text (512) 293-0710, email sconnolly@austin-patent-attorney.com, or fill out the form.
Phone: 512-293-0710
Email: sconnolly@austin-patent-attorney.com
Location: Austin, Texas
Serving Austin, Round Rock, Cedar Park, Georgetown, and all of Central Texas.
USPTO matters are federal — I work with clients throughout Texas and nationwide.