Essential or Overused? Navigating NDAs in University-Industry Partnerships
Oct. 1, 2024—Protecting intellectual property is usually a top priority in research collaborations, and non-disclosure agreements (NDAs) appear to be an obvious means for doing so. However, in university-industry partnerships, NDAs can lead to complications; their overuse or misuse can hinder collaboration, create roadblocks, and cause confusion about what information actually needs to be safeguarded. So, when are NDAs truly necessary?
NDA basics
An NDA is a legal agreement between two or more parties that maintains the secrecy of non-public information exchanged between the parties. Usually, the purpose of this information is explicitly stated in the agreement and is most often used while exploring a business opportunity. NDAs are best used when conversations between potential partners have been progressing without confidential information, and the parties now need to share proprietary materials to progress the discussion. This may be necessary to develop a project plan or to allow one party to assess the other party’s data. These kinds of evaluations are commonplace and enable collaborations to move forward with the necessary context to execute a successful project. For more on NDAs, see UIDP member Columbia University’s “What is an NDA.”
NDAs have broad use because they effectively protect a variety of information types in many situations and partnership arrangements. Numerous laws and regulations mandate the protection of specific kinds of materials, such as student and personal information, protected health information, unpublished patent applications, clinical study designs, regulatory correspondence or submissions, and more. For information on protected information types and some of the laws governing them, members can access UIDP Perspectives: NDA/CDA 101.
Best practices
Ideally, NDAs and similar agreements should only be used when necessary. For example, an NDA would be needed if a transaction or partnership cannot move forward without disclosing proprietary information. If the parties can continue discussions without the information, it’s best not to share it. Using an NDA when it isn’t essential can send the wrong message and make your organization look overly litigious to potential partners, stifling the collaborative spirit that helps cross-sector partnerships thrive. Not all information needs to be protected, and building a project on a foundation of openness and trust can contribute to its overall success.
If talks have progressed to the point where protected information must be shared, an NDA may be the right tool. A quick assessment will help you decide if it is. Ensure that the information is truly confidential and hasn’t been previously disclosed either publicly or with the partner in a separate negotiation. Confirm that sharing it is necessary for the collaboration and that the information is critical to the project’s scope and subject. Be specific about the information to be covered, its use, and the people who need access. Individuals should only receive information if they must. Controlling state law is another consideration that must be factored in. Both parties should be aware of applicable laws and consider how they will affect the use and treatment of the materials in question. For more, see UIDP Contract Accord 9: Disclosure and Protection of Confidential Information, or members can access the Strategies for Managing Confidential Information Quick Guide.
Why it matters
Universities and companies have different perspectives on sharing information. While universities try to disseminate as much knowledge as possible, companies must often keep things close to their chest to maintain a competitive edge. When collaborating, NDAs can be a helpful way to protect what needs to be protected, but it’s wise to establish whether such an agreement is necessary so its use doesn’t undermine partner trust.
We want to hear from you. How does your organization approach NDAs? Let us know on LinkedIn.