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Will a non-disclosure agreement prepared before technology sharing between startups be helpful in a legal lawsuit?

We are a startup developing an AI-based video analysis solution. A while ago, while discussing the possibility of collaboration with another company's venture team, we explained part of our core algorithm structure and some of our data processing methods. At that time, we prepared a non-disclosure agreement and handed over some technical materials. However, we recently heard a rumor that the other party independently launched a product similar to our idea. There is no clear evidence yet, but the situation is quite suspicious. Could we take legal action on the basis of the non-disclosure agreement?

non-disclosure agreement

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Author: 김국일

Hello. This is an AI/IT specialist attorney at Daeryun Law Firm.

A non-disclosure agreement is not merely a formal document but a legally valid contract.

The core purpose of a non-disclosure agreement is to prohibit disclosing the received information to a third party or using it without authorization, and if this is violated, legal action such as a civil claim for damages is possible.

However, having prepared a non-disclosure agreement does not automatically make legal action possible; the following requirements must be met.

1. The scope of the confidential information must be clearly defined in the non-disclosure agreement.

For example, a clause such as "the confidential information includes all technical materials, know-how, algorithms, design information, and the like provided orally or in writing" must be stated.

2. There must be materials proving whether the technology was designated as confidential information at the time it was provided.

For example, whether there was a confidentiality marking on emails, meeting minutes, or memos accompanying the transfer of materials is important.

3. The information that can be protected by a non-disclosure agreement is limited to technical information and management information.

Technical information refers to matters such as product designs and research and development results, while management information refers to matters such as marketing and sales strategies, pricing policies, and lists of business partners.

Because this matter requires proving a violation of the non-disclosure agreement, it is important to prove the identity or similarity between that technology and the client's technology.

If you are in a situation requiring legal review of and response regarding a non-disclosure agreement, we ask that you request a consultation with a specialist attorney.