1 Non-Disclosure Agreements in U.S. Government Procurement Context: Casual Exchanges and Observations Alan Dickson, Esq. Holland & Knight LLP

2 Rock Bottom – What is an NDA? -- A contract (“I promise not to disclose”) subject to principles of legal validity and interpretation like other contracts: -- Consideration? -- What law applies? -- Subject matter? -- What does it require to be done or not done? -- Enforcement / Disputes.

3 Typical Uses of NDAs ?? Part of employment contract or application? Part of officer/employee resignation/severance package? Can it be imposed as part of exit interview? Part of Teaming Agreement between companies? -- Very typical Preliminary commitment for discussions prior to TA? -- Typical and often advisable

4 NDA usage, Cont’d As an adjunct to “walling off” a person or group to mitigate an Organizational Conflict of Interest? -- Not uncommon However, of the 3 generic types of OCIs [unequal access; biased ground rules; impaired objectivity], courts and others may view the third as not being capable of remediation simply by firewalls and NDAs

5 Usage, Cont’d For Government transmission of contractor or subcontractor proprietary data / software to third parties under procedures in DFARS or

6 NDA Usage, Cont’d Settlement of disputes: –Lawsuits –Business spinoffs / unwindings –Divorce, custody, etc. –Common to require non-discussion, non- disclosure of amounts, terms, etc.

7 NDA usage, cont’d As part of company process of hiring outside legal counsel? Actual example: “____ proposes to disclose to Holland & Knight information that may be proprietary relating to a joint project involving development and manufacturing of _______.” That one needed some tailoring, obviously.

8 Usage, Cont’d More generic problem: “NDAs in a Drawer”. Must carefully consider the particulars and the purposes of NDAs. Must write so that the basics will be understandable by persons who are not parties to the actual transaction – e.g., bosses, higher- level Govt officials, judges, arbitrators.

9 Typical Terms of ND Agreements -- Recite purpose, parties -- Recite consideration -- Define confidential information and exceptions -- Not apply to Govt classified information -- Spell out nondisclosure obligations and exceptions (e.g., compelled disclosure by subpoena, court order, etc.) -- Term of agreement

10 Typical Terms, cont’d -- Return or destruction of materials, info -- Injunctive relief may be sought -- Indemnity running from recipient to grantor of data, etc. -- Disclaimers (e.g., no license implied, no property rights) -- In some cases (e.g., pre-teaming), no requirement for parties to enter into or maintain business relationship with each other

11 Terms, cont’d -- Parties not to disclose to third parties the existence or content of the agreement or of related discussions between parties -- No warranties as to accuracy or completeness of the confidential information -- Governing law; attorneys’ fees, assignment; no waiver, entire agreement, parties’ notices to each other; severability

12 Questions / Complaints / Threats ? ? ?

13 Thank You, SF Valley!! Alan Dickson Holland & Knight LLP Los Angeles