Confidentiality term sheet

Purpose of this confidentiality tool: This term sheet is useful to facilitate conclusion of confidentiality agreements. By using the tool, you will ensure that all important issues are considered fully and dealt with.

Article: “Understanding confidentiality undertakings


Parties:

Name of discloser:
(e.g. “XYZ (Pty) Ltd”; “John Black”)

Physical address of discloser:
(e.g. “2 Bunton Rd, Rosebank, Gauteng, South Africa”)

Name of recipient:
(e.g. “XYZ (Pty) Ltd”; “John Black”)

Physical address of recipient:
(e.g. “2 Bunton Rd, Rosebank, Gauteng, South Africa”)


Information:

General category into which the information falls:
(e.g. “microbial cream”; “geological survey technology”)

Include the following subsets:
technical information and specifications
manufacturing techniques
systems
processes
compositions
chemicals
methods of production
designs
circuit diagrams
blueprints
electronic artwork
samples
devices
formulae
information regarding materials
research activities and methodologies
experimental procedures
results and data
marketing and business information generally
define own subset:


Regulate receipts:

Must all confidential information be marked “confidential”?
No
Yes

Must all information received by the Recipient be requested in writing?
No
Yes

Was information provided prior to the date of signature of the undertaking?
No
Yes


Use:

Is the Recipient’s use (i.e. in addition to “disclosure”) of the Confidential Information restricted?
No
Yes. If so:

May the recipient use the confidential information for a specific purpose?
No
Yes. If so, describe purpose:
(e.g. “evaluate the technology of the Discloser with a view potentially to negotiate and conclude a licence between the Parties”; “manufacturing microbial gel for supply to the Discloser”)


Acknowledgements:

Include an acknowledgement of title in Confidential Information?

No
Yes


Steps to protect:

Must the Recipient, at the very least, treat the Confidential Information in the same way as it treats its own confidential information?
No
Yes

May the Discloser dictate steps that must be taken by the Recipient to maintain the confidentiality of the Confidential Information?
No
Yes


Ownership and return:

Will ownership in material including Confidential Information vest in the Discloser?
No
Yes

Must material including Confidential Information be returned to the Discloser?
No
Yes


Permitted disclosures:

Which of the following persons may the Recipient disclose Confidential Information to?
companies within the same group (i.e. connected (whether directly or indirectly) by at least 50% common ownership)
directors
members
managers
employees
contractor
auditors
legal advisors
other:

Must persons to whom the Recipient may disclose information accept obligations of confidentiality in favour of the Discloser in writing?
No
Yes


Information exclusions:

Which of the following categories of information are to be excluded from the definition of Confidential Information?

information that was lawfully in the possession of the Recipient prior to receipt thereof from the Discloser
information that is lawfully acquired by the Recipient from a source that is not subject to corresponding obligations of confidentiality in favour of the Discloser
information that is developed independently by the Recipient subsequent to the Signature Date without use of Confidential Information


Term:

For how long (calculated from the date of signature) will the Recipient be required to maintain the information confidential?


Law:

Which country’s laws govern the undertaking?
(e.g. “South Africa”)


Arbitration

Should disputes be referred to arbitration?
No
Yes. If so:

(a) Where should the arbitration hearing be held?

(b) Which rules should apply to the arbitration?
(e.g. “AFSA”)

(c) In the event that the parties cannot agree upon an arbitrator, who will appoint the arbitrator? (e.g. “the President from time to time of the South African Institute of Intellectual Property Law”)

(e.g. “the President from time to time of the Law Society of the Northern Provinces”)


Where to from here?

We will convert your term sheet into a watertight confidentiality agreement at a fixed price of R400 / US$30 / €20 (exclusive of VAT, which is not payable by non-South African clients).

Should we identify potential risks, we will call you to discuss the issues at no additional charge.

Anthony van Zantwijk (BSc Eng, LLB, LLM (Tax)) is a patent attorney and an expert in technology transfer with more than 10 years experience in negotiating and drafting IP transactions for multinational companies.


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