Iowa NDA Template
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An Iowa NDA, or “nondisclosure agreement,” acts as a legal agreement involving two or more parties, detailing which information you or the opposing party need to treat as confidential. NDAs are handy tools for startups and businesses seeking a safety net to fall back on should employees, potential business connections and the like attempt to disclose the company's confidential intel. They serve as guardians of your company's closely guarded secrets and crucial info—think along the lines of your business methodology or client contact roster—preventing this knowledge from falling into public or competitor hands.
Trade Secret Definition in Iowa
“Trade secret” means information, including but not limited to a formula, pattern, compilation, program, device, method, technique, or process that is both of the following:
a. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by a person able to obtain economic value from its disclosure or use.
b. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. (Iowa Uniform Trade Secrets Act § 550.2(4))
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Read on to learn more about Iowa NDAs, including:
What's included in a Iowa NDA?
Here are some key components that are typically included in a Iowa Nondisclosure Agreement:
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Disclosing and Receiving Party
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Definition of Confidential Information
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NDA Purpose
- Use of Confidential Information
- Limited Access to Confidential Information
- Exclusions - What's not Covered
- Term of Confidentiality Period
1. Disclosing and Receiving Party
In this part, the party "exposing" the confidential data is identified as the disclosing party. On the other hand, the one receiving that information is tagged as the receiving party. Unilateral NDA’s usually apply this concept. Conversely, in mutual NDAs, both entities are technically on either side of the dichotomy- they’re both receivers and disclosers. A noteworthy point here: if you stand as the individual in a disclosure/reception scenario (due to the absence of a company), your name would suffice.
This nondisclosure agreement (this “Agreement”) is dated [Date] (the “Effective Date”) and is between [Company Name of Disclosing Party; e.g. “Max Studios, LLC”; if you do not have a formal legal entity, use your legal name, e.g. “Max Smith”], (the “Company”), and [Company Name of Receiving Party; if receiving party does not have a formal legal entity, use their legal name] (the “Recipient”).
2. Definition of Confidential Information
When drawing up your NDA, it's crucial to describe what you identify as “confidential.” This term is of significance. Should an unrealistic clause like “every data I’ll share with you in the next two years is confidential” be enacted, the effects could be far from desirable. Now imagine your employer tells you tomorrow's weather forecast. Now if you relay this weather prediction to a bystander later in the evening- did that classify as a disclosure of confidential information? Highly unlikely!
A courtroom would never accept a clause as vague and wide-stretched as the one mentioned above. Conversely, maintaining the definition too specific and restricted might provoke an unintentional disclosure of confidential information from the receiving party. You can find a balanced approach to defining confidentiality in your NDA amongst standard definitions that companies often incorporate. Check out our more in-depth post about defining confidential information in your NDA.
“Confidential Information” means any information that is proprietary or unique to the Company and that is disclosed by the Company to the Recipient during the term of this Agreement, including the following: trade secret information; matters of a technical nature such as processes, devices, techniques, data and formulas, research subjects and results; marketing methods; plans and strategies; information about operations, products, services, revenues, expenses, profits, sales, key personnel, customers, suppliers, and pricing policies; and any information concerning the marketing and other business affairs and methods of the Company which is not readily available to the public. “Confidential Information” also includes information of others that (1) is disclosed under this Agreement, (2) the Company is obligated to protect from disclosure or restricted from using or both, and (3) that would constitute “Confidential Information” if the information belonged to the Company.
3. NDA Purpose
Every valid NDA – including the template readily available – will require a specification of its “purpose.” This could vary from principles like 'to facilitate the development of a specific product for the disclosing party' to determining if a business relationship is feasible between the information sharer and the recipient. The purpose is vital because it anchors the utilization of the confidential data to the recipient party.
Consider this - you hire a web developer to cater to your website's needs, providing your business proposition so they can gauge what the website should look like. In such an instance, limiting the purpose to 'furthering the development of...' plus expounding on specific parts of the website development would be beneficial. Absence of this purposeful limitation might permit the developer to use the shared confidential data to start a similar business independently, capitalizing on your confidential information.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
Your purpose behind signing an NDA is intertwined with the use of the confidential information. This provision restricts the use of confidential information strictly with respect to its intended purpose. It eliminates the possibility of misuse or exploitation of your confidential data. By keeping sensitive information within the boundaries of the known parties, this provision ensures the maintenance of privacy and protects all parties from prospective external threats or influence.
The Recipient shall use Confidential Information only for the Purpose. Unless otherwise agreed in writing, neither party shall disclose to a third party the fact that discussions or negotiations are taking place concerning the Purpose or any of the terms or other facts relating to the Purpose, including the status of negotiations between the parties.
5. Limited Access to Confidential Information
Let's say the "Recipient" of your confidential information is a company, or the recipient needs to consult with their attorney. How can we address these concerns? The "Limited Access" section of your NDA does just that!
Typically, the language from the template can be used without any issue. However, you'll want to consider who really needs access to your confidential information and restrict the use to those people. If the recipient shares the information with someone else, it's a good practice for them to require that person also sign an NDA with similar terms.
The Recipient shall protect the Confidential Information from unauthorized use and disclosure using the same degree of care that it uses with respect to its own information of like importance, but no less than a reasonable degree of care. The Recipient shall retain the Confidential Information in confidence and shall not disclose Confidential Information to any third party without the Company’s prior written consent. However, the Recipient may disclose the Confidential Information to employees, contractors, consultants, and authorized representatives of the Recipient who (1) require access to the information for the Purpose, (2) are informed by the Recipient of the Recipient’s obligations under this Agreement, and (3) are bound by contract or fiduciary duty to obligations of confidentiality and use restrictions with substantially similar function, purpose, scope, and effect to those of this Agreement and that are at least as protective of the Confidential Information as this Agreement.
6. Exclusions - What's not Covered
The "exclusions" section of your NDA is essential to increase the likelihood that a court will enforce your agreement, if it ever becomes necessary. In most cases, the provided language in the template is suitable. However, you may want to consider removing 4(a)(1) if you've already shared confidential information with the recipient.
(a) This Agreement imposes no obligations upon the Recipient with respect to Confidential Information that: (1) was known to the Recipient before disclosure by the Company as evidenced by contemporaneous records; (2) has become publicly available through no fault of the Recipient; (3) is disclosed to the Recipient by a third party that has the right to make the disclosure to the Recipient and that does not have any obligation of confidentiality with respect to the Confidential Information; or (4) is disclosed by the Recipient with the Company’s prior written consent.
(b) If the Recipient is required by any governmental agency, court, or other judicial or regulatory body to provide any Confidential Information received under this Agreement, then the Recipient will not be deemed to be in violation of this Agreement for the disclosure if the Recipient promptly gives written notice to the Company of the requirement to provide the Confidential Information and cooperates with the Company so that the Company may contest the requirement to provide the Confidential Information. The Recipient may disclose only that portion of the Confidential Information that it is legally required to furnish.
7. Term of Confidentiality Period
This provision indicates the term, or duration, your NDA will be effective. The term could range from covering a single, short business transaction or span indefinitely. The important thing is to ensure that your agreement lasts for the necessary duration to keep the information confidential.
If you're uncertain about the term length, remember that the typical period ranges from one to five years. Regardless of the duration, it's beneficial to include a provision stating that trade secrets must remain protected, even after the business relationship or contract has ended.
This Agreement will continue for a period of one year from the Effective Date unless: (1) terminated earlier by either party upon written notice to the other; (2) extended by the mutual written agreement of the parties; or (3) superseded by a subsequent written agreement that explicitly sets forth the obligations of the parties with respect to Confidential Information. With respect to business information, the Recipient’s obligations of confidentiality and non-use under this Agreement will expire three years from the termination of this Agreement. With respect to all information that constitutes a trade secret, the Recipient’s obligations of confidentiality and non-use under this Agreement will survive the termination of this Agreement for as long as such information remains a trade secret under applicable law.
What happens if I've already disclosed confidential information?
Not to worry! If you've already disclosed information to the other party, you can still make some adjustments to the template. Check out our guide on how to protect confidential information that you've already shared.
How do I protect my trade secret?
The primary purpose of NDAs is to safeguard your confidential information. However, the confidential data must be a part of the trade secret equation to hold real value. To ensure that your information qualifies as a trade secret and is fully protected, make sure to review our comprehensive guide discussing trade secrets, their qualifications, and protection measures.