A non-disclosure agreement (NDA) is often used by food businesses when they want to take a new product idea to market, maybe through using spare capacity of a third party manufacturer. In order to safeguard their original idea, a secret recipe or production process, they will require the other party to sign an agreement that they will not disclose this information.
Clearly it makes commercial sense to protect innovative ideas which could be exploited by another party if restrictions about how confidential information is used have not been put in place. However, the question arises whether an NDA is always the right approach to take. Without careful thought, these can be heavy handed, which in turn can prevent successful collaborations taking place. In some cases it may even be that there is not actually anything to protect. So it is important to take a step back and decide what each party is trying to achieve and whether there are other means of achieving their aims.
Our recent article, published in collaboration with Food Science Fusion, considers the issues.
Within the food industry NDAs are sometimes used simply as means to start a conversation about working together – maybe when it comes to outsourcing production. However often little thought goes into the purpose of the document and a party may find itself signing up to a broadly drafted ‘one size fits all’ type of contract, with an obligation of confidentiality, where the information is not in fact confidential.