Confidentiality Agreement, Law firm Veat's know-how protecting core assets of technology companies.

Law firm Veat received a request from an advanced technology integration engineering company (hereinafter referred to as the "client") to draft and review Non-Disclosure Agreements (NDAs).

The client requested an NDA review as part of the process of entering into a purchase agreement with a buyer, and Law firm Veat, specializing in corporate law, reviewed the agreement to derive the optimal contract terms from the client's perspective and minimize legal risks.

Since the client was likely to be in a position to provide confidential information, Law firm Veat reviewed and revised the NDA clauses, prioritizing the client's interests.

Law firm Veat’s Non-Disclosure Agreement (NDA) Review

1. Restriction on Use of Confidential Information

First, it was clearly stipulated that the recipient of the confidential information (the buyer) could only use it for the purpose of the agreement. Specifically, a clause was included to restrict the use of the information for other purposes unrelated to the agreement or its provision to third parties.

2. Strengthening the Definition and Protection Requirements of Confidential Information

Certain requirements must be met for information to be recognized as confidential.

To ensure that the information provided by the client received sufficient protection under the NDA, Law firm Veat incorporated obligations to expressly state that the provided information is confidential, and obligations to notify the other party that certain information is subject to protection through prior notification. By including these clauses, the client’s confidential information can be legally protected in the event of a legal dispute.

3. Clarification of Parties’ Obligations and Breach Penalty Clauses

If the recipient of confidential information breaches the agreement, the penalty clause must be clear for it to be effective. Therefore, the startup attorney strengthened the breach penalty clause to allow for legal remedies in the event of a breach. This increased the effectiveness of confidential information protection and enabled the client, as the information provider, to more securely protect its technology.

Why Non-Disclosure Agreements are Important

Companies in the ICT and IIoT (Industrial Internet of Things) sectors, where advanced technology is concentrated, secure a competitive edge in the market based on innovative technology and data. However, such technological advantages must be supported by security. It is particularly important to prevent the core technology and know-how from being leaked during collaboration or contract negotiations with external companies.

For companies in technology-intensive industries like ICT and IIoT, confidential information is essentially their core asset, making its protection essential. If technical materials or trade secrets are leaked without an NDA, they may be imitated or misused by competitors, which can lead to a weakening of the company’s market competitiveness.