Archive for the ‘Intellectual Property’ Category

A Few Key Issues In Review and Approval Of Non-Disclosure Agreements

Wednesday, September 17th, 2014

By Thomas C. Grella

The following is not intended to be a comprehensive review of non-disclosure agreement (sometimes also referred to as “confidentiality agreements”), and should not be taken as an indication that these are the only issues to be concerned with in review of such agreements.  Even though it is always recommended that non-disclosure agreements be reviewed by a qualified licensed attorney, to follow are a few common issues or concerns regarding typical non-disclosure agreements that you might consider as you make your preliminary review or analysis.

  1. Unilateral vs. Bilateral Agreement. There are basically two types of agreements.  The unilateral agreement is one where one party will be providing the information, and the other will be receiving information, and the party providing information is the only party with an interest to be protected in the agreement.  The bilateral (or mutual) agreement is used where both parties may be providing information to each other (such as, for example, in merger negotiations) and therefore both parties have an interest in protection. This type of agreement between parties may come in the form of stand-alone agreements (a document entitled “Non-Disclosure Agreement”, for instance), or they may come as one provision, or a series of provisions, found within a larger contractual agreement (such as an employment agreement or an asset purchase agreement).  The determination of which type of agreement to use (unilateral or bilateral) will depend upon the circumstances, however presentation of a unilateral agreement from the other party in a contract negotiation should not be assumed to be the correct form that is required.  Many situations may seem like circumstances where only one party needs confidentiality protection, however each party should closely examine their interests, and if there is any doubt, this is one type of agreement where the party with a greater interest in obtaining protection is likely to allow an agreement that reciprocates protection.
  2. Description of Confidential Information.  In many cases, the definition of the “confidential information” to be protected can be the longest paragraph in a non-disclosure agreement.  Though it is fair for the party desiring protection to include all of the possible types of information that might be disclosed, those being are asked to sign these types of agreements should be careful to assure that the descriptions are not too broad or vague.  
  3. Covenant of Non-Use.  Each non-disclosure or confidentiality agreement can be expected to have terms where one or both parties agree not to disclose to third parties information obtained, and to return information received once the term of the agreement is terminated or expires.  Agreements among competitors (such as in merger negotiations) should also contain terms where the parties agree that they will not use the information disclosed to them by the other party.  In addition, but related, every non-disclosure agreement should clearly spell out the purpose of the disclosures (ie. merger negotiations, employment negotiations, business sale, etc.); and it should be a narrowly defined purpose.  A properly defined, and very specific, purpose provision might also be the basis for restricting unintended future use of information by a competitor. 
  4. Exclusions from Disclosure Agreement. To follow is a typical provision that is usually found in every agreement:

“Confidential Information shall not include any information which (i) is or becomes available to the public other than as a consequence of a breach of any obligation of confidentiality; (ii) is or becomes known, from a source other than the Party hereto to which it belongs and without breach of any obligation of confidentiality by the other Party hereto prior or subsequent to its receipt from the Party to which it belongs; or (iii) is independently developed by either Party hereto without reference to any information disclosed pursuant to this Agreement.”

 These types of exclusions are very broad. It can be difficult to prove they do not exist. A party to such an agreement might desire to protect its interest by adding one or more conditions to the operation of the exclusions.  Some conditions to consider as requirements to be provided to the party otherwise protected by the terms of the Agreement prior to disclosure are: 1) prior notice of any proposed disclosure, 2) submission of documentary evidence proving a basis for application of the exclusion, and 3) a requirement that the party making a disclosure be able to show that the exclusion was necessary and is defensible upon some elevated evidentiary standard of proof.       

Please feel free to contact any one of our Corporate Practice Group attorneys  if you should be in need of help in interpretation or review of a non-disclosure agreement (or a confidentiality provision within a legal document).

What You Can Learn From My Summer Vacation

Wednesday, August 21st, 2013

By Sabrina Presnell Rockoff

Our second August post comes from the Chair of our Labor & Employment Team, Sabrina Presnell Rockoff. Sabrina has her own regular blog where she discusses human resources topics at

Well, it happened. This morning we woke up earlier; the sun rose (or I’m assuming it did somewhere despite the rain); we dropped right back into the routine of eating bowls of cheerios at the kitchen bar; we sat through the car pool line; and just like that—school started again. In classrooms all over the country over the next three weeks, kids are going to be asked in one form or another to share what they learned over summer vacation. In homage to this decades-old ritual, I want to share something you can learn from my summer vacation.

The first weekend in August my husband and I took a trip to Nashville, Tennessee –our own three day “grown up” vacation. I had never spent a lot of time in Nashville, and as a fan of great, old country music, I was mesmerized. We visited the Country Music Hall of Fame, the Ryman Auditorium, the Johnny Cash Museum, and the famous bar Tootsies, where Hank Williams, Sr., would go to drink in between Opry sets (sometimes he made it back for the second set; sometimes, he didn’t). By Saturday at noon, all of the restaurants and bars along the main drag were hopping with live bands. We ducked in and out of several places, hearing everything from original music to songs made famous by Alabama, Little Big Town, Merle Haggard, and Buck Owens.

As I happily sang along off-key with each band, I had two thoughts: 1) I wonder if this place is correctly applying the tip credit for those bartenders (perhaps a post for another day); and 2) I wonder who has the license for that music and if this bar should be allowing that band to play that song. This isn’t exactly an employment law topic, but it is a serious one that you should consider if you have an establishment that allows any type of live music or that plays canned music for your patrons. Whether you are a restaurant or bar with a Friday night cover band or a dentist office that plays music in the waiting room for patients, you could be in violation of copyright laws and not even realize it. Based on recent past experience, even if you don’t realize you are in violation, the companies that own the copyrights to the music may—and legally, your ignorance is no excuse from statutory copyright violations.

Federal copyright laws regulate when copyrighted music can be played for the advantage of a business. If you have a cover band or play other music for your customers, even if they are not directly paying you for the chance to listen to the music, you may still be considered to be playing the music for your own financial benefit as a business owner and/or operator. If you have such music playing in your place of business without having the proper license for the music, you may be in violation of the copyright laws, which provide for statutory damages and attorneys’ fees. The federal copyright laws also allow, in certain situations, for personal liability by the owner/operator, regardless of the corporate structure of the entity involved.

All well and good you may say, but practically speaking, how are these laws enforced? The companies that own the copyrights (just a handful own most copyrights to popular songs) are charged with protecting their rights. So these companies hire individuals to go into places with live music or with canned music that the companies know do not have licenses to play their music. These individuals write down each song they hear played and report that back to the companies. The companies then file a lawsuit. Think it can’t happen to you? It is happening in Asheville, Charlotte and Raleigh.

So what should you do? If you play canned music, for example through a cable music channel, ensure that you have the proper license through the company providing the channel to play the music for customers. If you have live music, either restrict the music that can be played in your establishment to the original music of the musician or negotiate a license from the major music copyright holders. You should also have live music acts sign agreements regarding what licenses they hold and the type of music they agree to play or not to play. These agreements are not an absolute defense to a copyright violation claim, but could be helpful. The federal copyright laws are very specific. Before attempting to review your current agreements or draft new ones, you should consult legal counsel. At our Firm   Rick Jackson  focuses in this area of the law and can help you determine the best way to protect yourself and respect the copyright laws.

Meanwhile, if you would be excited, as I was, to see Bobby Bare sing “(Margie’s at) the Lincoln Park Inn” at the Grand Ole Opry live, we should talk music sometime!