What is the difference between a mutual and one-way NDA?

On Behalf of | Jan 5, 2021 | Trade Secret Litigation |

If your client has an interest in protecting trade secrets, it is likely that disclosing trade secrets for gain will be part of the conversation at some point. Your client may wish to disclose a trade secret for multiple reasons, but he or she must take proper precautions before doing so.

The most common way to create these protections is with a non-disclosure agreement. This will create a confidential relationship between your client and the party to whom your client will disclose the trade secret. Your client may choose between creating a mutual or one-way agreement, according to FindLaw.

What are one-way non-disclosure agreements?

The most common variety of non-disclosure agreement is the one-way agreement. Typically, these are part of the traditional onboarding process for employees. Once the company hires an employee, the employee must agree to sign a non-disclosure agreement in exchange for employment.

If your client wishes to introduce a non-disclosure agreement after hiring an employee, he or she must offer the employees something of value in return for signing the non-disclosure agreement.

What are mutual non-disclosure agreements?

The mutual non-disclosure agreement is more rare, but your client may require one in certain circumstances. The idea behind a mutual non-disclosure agreement is that both parties involved in the agreement will disclose confidential information to each other in the pursuit of mutual benefit.

An example of this situation may be an inventor of a new widget agreeing to disclose the widget to a company in order to get a list of high-paying clients who would have an interest in the widget from the company.

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