VCU Innovation Gateway reviews, negotiates and executes Nondisclosure Agreements (NDAs) for VCU faculty and staff. We strive to execute these agreements as quickly as possible so that you can continue with your research. Although standardized contract language exists for NDAs, a significant percentage of universities and an even higher percentage of companies do not adhere to such language. Below, we describe the purpose of NDAs and some of the issues that may be involved in getting these agreements completed.
If you need an NDA completed as part of your research, please contact VCU Innovation Gateway. It will be helpful to forward us the correspondence that you had with the other party and any draft agreements that they may have sent to firstname.lastname@example.org or mail to VCU Innovation Gateway P.O. Box 980568.
An NDA is a contract that states the terms and conditions for the sharing of confidential information between VCU and an outside organization. Confidential information is shared under a valid NDA between VCU and another organization so that the parties can consider entering into a license or research agreement, or discuss a possible collaboration or funding opportunity. Confidential information may include unpublished details of inventions, business methods and plans, research protocols and proposals, research results and software code. VCU information which has been publicly disclosed (either orally or in writing) will not be considered confidential under an NDA.
If both VCU and the outside party will be sharing confidential information, then a Bilateral NDA will be executed. If only one party will be sharing their confidential information, then a unilateral NDA will be executed. NDAs typically will define the nature of the confidential information to be shared and will have short period of time (usually 1 year) in which the confidential information can be shared and a long period of time (3 to 10 years) in which the receiving party must not disclose the other party’s confidential information. Usually, when confidential information is transferred to the other party, it must to marked “confidential” in order for it to actually be considered confidential under the agreement. VCU faculty and staff have an obligation to protect an outside party’s confidential information and should only disclose such information to other VCU faculty and staff on a “need-to-know” basis.
Potential Issues with NDAs
VCU Innovation Gateway works to quickly review, negotiate and execute all NDAs that are requested by VCU members. We often receive agreement drafts that contain legal language or conditions that are problematic. Problems may arise if the agreement contains clauses that we are not allowed by the Commonwealth’s Attorney General’s Office to have in contractual agreements. In addition to particular legal clauses that we are not allowed to have in agreements, the agreement may contain other contractual conditions requested by the other party that are detrimental to you, your sponsor and/or VCU. Some of the most common problematic clauses and their typical resolutions are listed below. In most cases, we are able to successfully negotiate these problematic clauses by drafting mutually acceptable terms and conditions in order to quickly get the agreements completed. However, in rare cases, the other organization will not allow any changes in their draft, and we will not be able to execute the agreement. We will keep you informed on any issues as they may arise.
Common Problems in NDAs and Their Resolutions
Choice of Law and Courts: Contractual agreements often specify which state law the parties want the agreement to be governed by and which courts will be used if a dispute arises. As a Commonwealth of Virginia institution we prefer to have Virginia law in the agreement. We are not allowed to sign any agreement that specifies the laws of any other state or country. Many organizations want their agreements to be governed by their own state or country law. Resolution – We agree that neither party gets favored choice of law and we simply delete the choice of law clause.
Indemnification and Hold Harmless Clauses: We often get agreement drafts from universities and companies that require that VCU will defend and protect that party from any legal actions that may result from our use of the material or information. This is a requirement for indemnification. We are not allowed to indemnify another organization. Resolution – We use standard language that states that VCU will be responsible for its own actions.
Assignment of Future Inventions and Creations under the Agreement: In consideration for sending their information, companies often want to take ownership of any inventions or creations that you may develop using the information. In some cases, the company may be concerned that you might develop an invention that may interfere with their ability to market their own products or services. Assignment clauses are only acceptable to VCU in rare circumstances and require special approval. Resolution – We can offer to license inventions that rely on the use of their information. See the discussion on licenses below.
Free Licenses and Options to License New VCU Inventions: A company may ask for a free license to any invention you develop that is related to the use of their information. Although we would still be able to nonexclusively license an invention to another company, it would be very difficult to nonexclusively commercialize an invention that may require FDA approval. Alternatively, the company may ask for an option to negotiate a fee-bearing exclusive license for inventions. This is generally acceptable to VCU unless there is a possibility that research tool might be developed under the agreement. NIH has a policy that research tools developed under NIH funding be commercialized nonexclusively so that the tool can be widely used by other laboratories. In other cases, this kind of language in a MTA might conflict with the terms and conditions of another MTA and research agreement with another company. Resolution – We will work closely with you to ensure that any licensing terms are suitable to you, VCU and your sponsor.
Restrictions on Publications: Almost all applicable agreements with companies will have some language that allows the company to review a manuscript before it is submitted for publication. Mainly, the company wants to be able to remove any of their own proprietary information from the manuscript and may want to seek patent protection for any inventions disclosed in the paper. The company may demand a very long period of time to review you manuscript, which may have a significant impact on your ability to publish. The company may also want to be able remove VCU proprietary information from the paper. Resolution – VCU Innovation Gateway believes that your ability to publish should be protected. We prefer that the company has a maximum of 30 days to review your manuscripts and cannot remove any text and results other than their own confidential information.