Enforcing an International Non-Disclosure Agreement for IT Services & Work
Brief Information: Non-Disclosure Agreements: –
Non- Disclosure Agreement are those agreements where the parties to the agreement agrees not to disclose the information given in the agreement. It basically denies the access of the third party on the information mentioned in the agreement. It typically serves three basic functions, namely, protecting the sensitive information, helps inventor to keep patent rights and lastly differentiates between exclusive and confidential information. A Non-Disclosure Agreement is regarded a necessity for IT-service projects, that are outsourced. This agreement also helps in resolving any dispute in case a party to the agreement breaches some part of the agreement.
Few Concerns to be considered while enforcing a Non-Disclosure Agreement: –
It may be noted that it is possible to enforce Non-Disclosure Agreements in some outsourcing countries as their judiciary have turned pro-active in securing the interests of the customers who possess proprietary information. However, there some clauses common to the United States law which might not be enforceable in every customer country (outsourcing base). Few of the concerns in relation to the enforcement of Non-Disclosure Agreement are namely:
- There are several statutes that nullify security under the agreement (Non-Disclosure Agreement), thus it might be difficult to secure the disclosure of the information contained in the agreement in case an independent party urges release of the same.
- Most of the offshore corporates simply take the Non-Disclosure Agreement as a document to maintain the confidentiality of the information relating to the product formula and design. According to them, the same does not secures the disclosed information from being exploited by some other contractor in his individual interest.
- Few contracting corporates fail to indicate the duration for the agreement, thus making their agreement vulnerable to breach long post-completion of the legal agreement. This may make the third-party corporate in-correctly assume that the project has completed, however in reality it was just an end of the Non-Disclosure Agreement.
It may be noted that enforcing a foreign judgement against an international company or a service provider is an arduous and expensive task with a lot of time consumption. This is simply because the proceedings primarily depend upon the law of the land. In the United States, trade secrets are granted statutory security, both at federal and state levels, with significant civil and criminal remedial measures to counter the misappropriation of confidential information. However, in the case of India, such statutory or legal protection of confidential information does not exist. However, few effective strategies to protect confidential information including the one contained in the Non-Disclosure Agreement offshored to India. One of them being realistic assessment of the challenges of the Intellectual Property Rights before constructing an outsourcing relationship. It is better to demand flawless provisions in the legal agreement so that the service provider guarantees confidentiality of the information. This helps the contractor not to suffer for intellectual property that could have been shared in the transaction.
Any business may suffer from irreversible damage and may further even lose out its competitor if its confidential information is leaked. Hence, it is important that confidential and commercially valuable information must be secured through a contractual agreement between the outsourcing and service providing companies. Non-Disclosure Agreement provides a proper legally binding agreement reminding both the parties to keep the confidential information secured.
Authored By: Adv. Anant Sharma & Aniket Pandey