Last updated: 
3 January 2019

A non-disclosure agreement or NDA is one of the most useful documents to have at your disposal when starting a business. With it, you can safeguard your business's confidential information before registering your IP with us.

We've developed the IP Contract Generator to help you develop your own NDA with ease.

The IP Contract Generator will help you:

  • recognise and consider key issues in your projects 
  • negotiate an agreement between potential business partners 
  • reduce the time money and effort required to develop an NDA

The agreements provided in this tool are a starting point and designed to assist low level activities. The agreements will need to be adapted to your own circumstances and, where practicable, reviewed by an independent legal advisor.

Please note, IP Australia is unable to assist in the development, execution, or enforcement of agreements generated by this tool. Check out the IP Contract Generator!

FAQs

What is an NDA?

An NDA is a legal contract, which should be used when sensitive information needs to be shared between two parties. It ensures that the person or organisation who gains access to sensitive information doesn’t disclose it to a third party.

When should I use an NDA?

You can use an NDA when interacting with one of the following:

  • potential business partners
  • industrial and graphic designers
  • manufacturers
  • stockists
  • accountants
  • financial and business advisors
  • marketing and PR firms
  • investors

What type of agreement should I use?

The IP Contract Generator lets you create two types of agreements:

  • A one-way NDA, if you are the only party disclosing sensitive information.
  • A two-way confidentially agreement, if both parties are disclosing or exchanging sensitive information.

Consider what your NDA will cover

For example, an NDA could protect information shared in meetings or presentations. Or it could protect information that is recorded and marked confidential.

What is the permitted purpose?

A good NDA should state why you are sharing confidential information without specifying the confidential information itself.

Your permitted purpose may be:

  • to evaluate your technology
  • to discuss and seek expertise for a new mechanical invention
  • to evaluate the parties interest in developing research collaborations concerning
  • to discuss the possibility of the parties entering into a consortium agreement
  • to evaluate the information to assess entering into a joint venture

Remember, you can always widen the purpose at a later date, however, you won’t be able to narrow it. Don’t include confidential information in your NDA

How long should the NDA last?

The “duration of obligations” section details how long sensitive information should be kept confidential. The specified timeframe begins on the date the NDA is signed, not from the end of the relationship.

For example, two parties may agree to collaborate on a project. They enter into an NDA, specifying it will last for two years. If the two parties are still collaborating in two years and six months, the confidentiality obligations and protections under the NDA will have lapsed. Even though the two parties are still working together and intend for the protections to continue.

You can choose a number of years or an indefinite period but please note that an indefinite term may or may not be upheld by a court and there can be some dangers in specifying an unreasonable timeframe.

Which state and territory law will be used to interpret my NDA?

Many choose to select the same state or territory where their head office is located. For example, if your head office is in Sydney, you would choose NSW.

If you would like your agreement to be governed by a different state or territory, for example, where you do most of your work, simply select that state or territory.

How is an NDA enforced?

An NDA is only effective if all parties privy to the confidential information have signed the NDA. If you share information before the NDA is signed, the information may not be protected.

Some companies or organisations may ask you to sign a document agreeing that they will not have a duty to keep your ideas or information confidential. If that is the case, you need to decide whether to risk disclosing your ideas to them will benefit you and your business.

How do I manage my disclosure?

You should record what you disclose at meetings or in presentations. Ask people present to sign a paper copy of a presentation, or a technical drawing to prove they have seen it.

Record what information you disclose in informal situations such as discussions or conversations. Note when and where that took place and who was present at the meeting.

Anything else I might need to know?

  • Be realistic: the person you are talking to might need to share your information with others, perhaps their employees or professional advisors. They may also need to copy your information for this purpose but be sure these disclosures are made in confidence.
  • Make sure the right person signs the NDA. This could be:
    • a director of the company
    • an officer of the recipient institution
    • someone senior who has authority to give the undertakings in the NDA
  • If you're required to sign an NDA, always carefully read the conditions of the NDA which another party asks you to sign. Make sure it doesn’t unfairly restrict your future activities.