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Automotive OEM
2017-02-27 23:22:00

How to enforce NDA?

Hi everyone,

Can anyone please share their advice on how you enforce your Non-Disclosure Agreement? If you have a large pool of subcontractors working on information sensitive project, how can you really makes sure they wont share it?

Is having liquidated damages spelled in agreement the best and only way to do this?

Really appreciate any thoughts on this.
 •  ThyssenKrupp Industrial Solutions (India) Private Limited (formerly Uhde India Private Limited)  •   2017-03-01 11:20:42
Dear Vladimir,

First you need to sign a flow down NDA with your subcontractors on the same (or stricter) terms as with your customer and get your subs sign NDA with their personnel working on the project. This will ensure that your subs (and personnel) adhere to the confidentiality requirements. This should be followed up with surprise audits on the working of your subs to ensure that the NDA provisions are adhered to.

As regards your question of LD, I do not think it is a good idea to have LD in NDA. The whole premise of NDA is that unauthorized disclosure would result in irreparable loss and damage to the owner of the sensitive information. This fundamental premise will be diluted if you put LD provision in NDA.
 •  Automotive OEM  •   2017-03-01 17:24:45
Hi Rajesh,

Thanks, I see your point. The purpose of LD is to get supplier/subcontractor who violated NDA immediately pay damages, rather then going through investigation and litigation.

This seems to be more effective and fast way to control and enforce your NDA.
However, I was wondering what else you can do to get your NDA work better and actually prevent contractors disclose (by accident tor on purpose) info and pay more attention to NDA.
 •  Pretorius Consulting  •   2017-06-01 07:12:48
The number one rule regarding the NDA is know what information you are sharing. Set it out in writing. For every meeting, any new confidential information should be captured, this includes conversations, ideas, discussions etc. Capture it in writing between the parties. Always mark your documents "Confidential"

Keep your subcontractors updated of their obligations, create an opening remark at all your meetings.

Have an Information Security Policy for your company, spelling out what the different security settings are for your confidential information, Wikipedia has a good starting point. en.wikipedia.org/wiki/Information_security and Classification en.wikipedia.org/wiki/Classified_information

More importantly ensure that your company has access control based on need to know, need to access.

In order to make a claim for breach, you first will have to provide evidence that the information was indeed classified and controlled. Each country applies their own Trade Secrets Acts differently but one thing is for sure, if you are giving your core intellectual property away to a "large pool of subcontractors" it will be very difficult to prove that the information hasn't gone "public".
 •  Pretorius Consulting  •   2017-06-01 07:15:18
One other thought. Every single subcontractor you work with will have vendors. Ask for a full disclosure of all companies and people that your subcontractor will be contacting in order to perform their portion of the work. Include that list in your NDA.
 •  Telefonica  •   2018-03-27 17:36:37
Carrie nails it below (above?).

When you disclose information, mark it appropriately and ask the recipient to acknowledge receipt. Also, ask for sight of the recipients 'information control policies' to satisfy yourself that they will apply appropriate control and rigour, and also ask for details of any audits/checks that they conduct to ensure compliance with their own processes/policies.

Of more importance to me: if you are GENUINELY concerned that the recipient will breach the provisions of the NDA,I would be wary of disclosing anything of importance at all. An NDA isn't an obligation to disclose, its an obligation to protect what has been disclosed.
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