A few years ago, our firm defended a client against a claim of patent infringement.  As it turned out, our client had disclosed its confidential information to a potential business partner during a pre-collaboration exploratory meeting, which the potential business partner then used to obtain the patent they were asserting.  Luckily, our client had insisted on putting a non-disclosure agreement (NDA) in place before the meeting and had clearly marked the information as being confidential.  Because of these precautionary measures, not only were we able to invalidate the patent, but we also won a breach of contract counterclaim based on the unauthorized use of the confidential information.

If you are exploring the possibility of collaborating with another company, you are likely going to exchange confidential information with that company so you can evaluate what they have to offer and they can evaluate what you have to offer.  Although necessary, these types of exploratory meetings can be a trap for the unwary.  Below are a few measures that should be taken to protect your confidential information before, during, and after any such meetings.

• Before the meeting, identify your confidential information as compared to publicly available information.

Broadly speaking, confidential information encompasses any information that provides a competitive advantage and is not publicly known.  Thus, any non-public information that has actual or potential economic value should be protected.  When in doubt, assume the information has value and take measures to guard its secrecy.  Once identified, clearly mark your materials, such as by labeling documents as “confidential” or putting a footer on each slide of a presentation indicating its proprietary status.

• Before the meeting, know what protections, if any, are in place for your confidential information.

Make sure NDAs have been signed by everyone that will be attending the meeting.  If multiple parties will be attending, you may need a multi-party NDA.  It is a good idea to send NDAs in advance to allow the other side to review and, if needed, edit the NDA.  Know the parties who have signed NDAs and what disclosures are covered by those agreements.  For example, some NDAs are one way–i.e., they only protect disclosures from one party to the other and not vice versa.  Also, some NDAs may be subject-matter specific–i.e., only protecting certain categories of information.

• Before the meeting, know the scope of what you will disclose.

Determine in advance what confidential information must be shared, may be shared, and should not be shared and stick to the plan. If no NDA is in place, avoid disclosing any confidential information. If, for business reasons, you have a need to share information without having an NDA in place, share the information at a sufficiently high level that, even if someone knows the objectives and results of your solution, they will not know how those objectives and results are achieved.

• At the meeting, know your audience before you disclose.

If, at the meeting, there are attendees who are not subject to an NDA, have those parties sign an NDA or do not disclose confidential information.  It is perfectly normal to delay the start of a meeting in order to have all attendees sign an NDA.  If confidential information is inadvertently disclosed to a party that has not signed an NDA, be sure that party knows you consider the information to be confidential and then follow up with an NDA after the meeting.

• At the meeting, keep records of the attendees and the information discussed.

Maintain records of the parties that attended the meeting and what confidential information was provided to them.  Be sure you identify confidential information in the manner required by the applicable NDA.  For example, if confidential information is disclosed orally, some NDAs require a written follow-up indicating what information is confidential.  Even if not required by the NDA, it is a good idea to send a follow-up email broadly outlining what confidential information was disclosed.

• At the meeting, be aware of confidential information received from another party.

If possible, avoid receiving confidential information from the other side.  If you do receive confidential information, send a follow-up email narrowly stating what you received—do not use open-ended language, but do end with “and nothing else.”  If you receive an email from the other side stating what confidential information was disclosed to you, review the list and send an email agreeing with the list or narrowing the list, as appropriate.

• Remember that an NDA is intended to be a temporary arrangement while the parties evaluate each other.

If you choose to partner with a company on a project, establish a more formal relationship via a joint development agreement or other appropriate contract that specifically addresses ownership of intellectual property.