Intellectual Property: Independent Development
NDA
Table of Contents:
Exclusion from NDA Terms
Competitive Products
Intellectual Property: Independent Development
The mere act of entering into an NDA should not preclude a party from continuing to operate its business in the ordinary course, including the development of intellectual property without the use of the other party’s confidential information. In contrast to the issues raised when a recipient of confidential information creates intellectual property based on such information (see section entitled “Intellectual Property: Ownership of Developments/Inventions”), the parties may also clarify the right of the recipient to have and retain ownership rights to intellectual property it creates which is not based on such information.
Exclusion from NDA Terms
As illustrated in the following exemplars, activity involving the independent development of intellectual property is to be expected and authorized notwithstanding the terms of the NDA:
Exemplar N14G-1
The terms of confidentiality under this Agreement shall not be construed to limit either the Disclosing Party or the Receiving Party’s right to independently develop or acquire products without use of the other party's Confidential Information.
Exemplar N14G-2
The Disclosing Party acknowledges that the Receiving Party may currently or in the future be developing information internally, or receiving information from other parties, that is similar to the Confidential Information. Accordingly, nothing in this Agreement will be construed as a representation or agreement that the Receiving Party will not develop or have developed for it products, concepts, systems or techniques that are similar to or compete with the products, concepts, systems or techniques contemplated by or embodied in the Confidential Information, provided that the Receiving Party does not violate any of its obligations under this Agreement in connection with such development.
Exemplar N14G-3
Discloser acknowledges that Recipient may currently or in the future develop information internally, or receive information from other parties that is similar to Discloser’s Confidential Information. Nothing in this Agreement will prohibit Recipient from developing or having developed for it products, concepts, systems or techniques that are similar to or compete with the products, concepts, systems or techniques contemplated by or embodied in Discloser’s Confidential Information provided that Recipient does not violate any of its obligations under this Agreement in connection with such development.
In the following exemplar, independently developed inventions are expressly excluded from the NDA’s confidentiality and non-use restrictions:
Exemplar N14G-4
The foregoing confidentiality obligations shall not apply to Confidential Information which:
(a) was known to the Recipient on a non-confidential basis prior to its disclosure by the Disclosing Party (as evidenced by the Recipient's records); or
(b) is in or comes into the public domain except by any breach of this Agreement (except that any compilation of otherwise public information in a form not publicly known shall nevertheless be treated as Confidential Information); or
(c) becomes known to the Recipient by the action of another person not in breach of any obligation of confidentiality owed to the Disclosing Party; or
(d) is developed by or for the Recipient independently of the information disclosed by the Disclosing Party; or
(e) the parties agree in writing that the information is not confidential.
But key to such rights to develop intellectual property is that such development must be “independent.” Development can be considered “independent” for this purpose if such development was without the assistance of the disclosing party and/or without use of any protected information received from the disclosing party:
Exemplar N14G-5
For purposes of this Agreement, an invention is considered developed by either party at any time independently of the Information disclosed to it by the other party by persons who have had no access to or knowledge of the Information (this must be proven by written evidence).
Competitive Products
In the following exemplars, the receiving party’s right to develop independently also includes products that may compete with those of the disclosing party:
Exemplar N14G-6
Further, nothing in this Agreement shall be construed as prohibiting or restricting either party from independently developing, acquiring, and marketing products, services, and other materials, which are similar to or competitive in any geographic area and in any form with the other party’s product(s) or service(s).
Exemplar N14G-7
Each Party, as a Disclosing Party, understands that the Receiving Party may currently or in the future be developing information internally, or receiving information from a third party, or may have prior to the disclosure hereunder developed or acquired information that may be similar to the Disclosing Party’s Information. Accordingly, nothing in this Agreement shall be construed as a representation or warranty that the Receiving Party will not develop products or services, or have products or services developed for it, or enter into any arrangement, that without violation of any of the provisions of this Agreement, compete with the products or services which are contemplated by and/or which are the subject of the Disclosing Party’s Information or the Purpose.
Finally, the following exemplar permits the receiving party to disclose independently developed information to a third party so long as the receiving party does not alert the third party to similarities with the disclosing party’s information:
Exemplar N14G-8
Each Party shall be allowed to work with persons or entities that have independently developed information or materials similar to the Confidential Information, provided, however, that each Party agrees to not disclose the fact that any similarity exists between the Confidential Information and the independently developed information and materials.