In this week's lecture, Confidentiality Disclosure Agreements (CDA) and Non-Disclosure Agreements (NDA) were discussed as common agreements between companies. confidentiality agreements are necessary in order to protect the intellectual property of the company when they are working with an outside source such as a consulting firm. Some example questions were listed in the lecture of what should be discussed in a consulting agreement.
What are the most important points that should be discussed with a consulting firm when finalizing a consulting agreement? What are some examples of confidential information that a company would want to protect?
I think an obvious point that should be discussed prior to finalizing a consulting agreement is the pay. The consulting agreement should specify what the hourly rates will be or any charge that will encompass the completion of the project. Another point to discuss prior to finalizing a consulting agreement are the invoice rates. Along with the amount that is being charged, the invoice rates should be discussed as well. Weekly, biweekly, monthly, etc. invoices should be determined prior to any consulting agreement, therefore, client and consultant will know when they will get charged/ paid.
Confidential information could be thing like products that you want to get patent for but don't quite have it yet. Another example would be a specific algorithm that you use that sets your company apart.
I think it's important to discuss the responsibilities of the consulting firm in the agreement and ensure that all expectations are crystal clear. Of course, in a confidentiality agreement there is information that you would like to protect as well as certain actions that a firm should take to ensure the intellectual property is not leaked or revealed. You would want to make all of these expectations extremely clear in the agreement so as if a violation does happen, you can protect the company from any repercussions and also hold the consulting firm responsible.
A company may want to protect intellectual property that is in the process of being patented and leaks could jeopardize the patent process as mentioned earlier. Also important are things that a company does not want to patent, as patents expire. These are trade secrets. They may be things like recipes or they could be manufacturing techniques but they are exclusive and unique to the company but they may be important for a consultant to learn about to do their job effectively. A company will need legal protection in the form of an NDA to ensure they can trust these trade secrets in the hands of an outside contractor.
The confidentiality agreements are essential to protecting confidential information shared between companies. I agree with @kaf43. Certainly, the pay would be one of the most important points to discuss during an agreement. Many companies base their choice to engage in business depending on the status of the company and the "price" within the agreement. In my opinion, there's just one point above the pay that would really provide a strong base for the business being conducted: expectations. If a company's expectations for a project exceed the limitations of the consulting group or project management team, this may be detrimental to the ability to conduct business. Ensuring that this is the primary point of discussion will set the foundation for all other components of discussion. Some examples of confidential information that a company may want to protect include pricing, clients, specific designs, and research and development of upcoming or current products.
As discussed in the lectures, the CDA and NDA will have all the basic parts that a contract would have. These would ofcourse include all the basics for confidentiality, trade secrets and information, and pay as well. Whether pay would be considered just part of confidential items or would be its own "category" in the contract is something I'm unsure of, but I do agree that pay would be one of the more basic pieces of information in the documents. Additional, the legal details, or at least most of the basic ones, would be included here as well because there are some overlapping details that can be both legally related but confidential between the involved companies. I would keep in mind however this is a one way or a mutual agreement, because I assume there are differences between the information included in the two different sub-types.
At my current position, I do a lot of consulting work with companies working on projects that are still in process. As such, most of the info I am privy to is somewhat protected. Usually, under respect for the rules of business, no NDAs or CDAs are signed. On occasion, a company will reach out; and before any work is done we must call and discuss the scope of the project, feasibility, payment, and NDAs are signed.
One of the most important topics that should be covered is the scope of the work that the consultant is being hired to do. Once the scope is clearly defined then the company can determine a reasonable wage and how much access to company files and systems the consultant should be given. Further, this makes it clearly defines to the consultant what their role is and what the company expects from them.
I agree with what many have said previously like @kaf3 about the pay being fully defined and @ac825 about a specific algorithm should be kept secret that can set you apart. I think this example of algorithms can fall under the umbrella of trade secrets and how any piece of information that is exclusive to the company should not be shared with anyone outside of the company. If the information is of extreme sensitivity then it should be strictly defined in the NDA or CDA that the information cannot be shared with anyone outside of the department, team etc. Furthermore, I believe that the expectations of the signee should be clearly defined in terms of hours expected, outcome of work expected, availability, quality of work.
Other examples of confidential information that should not be shared could be formulations, techniques, protocols. Formulations take years of work and several trials until it has been perfected. This can be related to drugs and how their exclusive formulation can make their product separate from the rest due to its capabilities. With techniques and protocols, these are tweaked over time with experience, similar to formulations. The way a company processes its materials can be what sets them apart from the rest of their competitors.
I feel as if one question not entertained enough is whether the work being done is legal or not. Granted, perhaps asking this question outright, will not get the answer directly if the company you work for is already doing dubious activities, but a relative amount of research should give you some clues as to what to ask to make sure you are staying within the appropriate legal bounds. Additionally, while I agree that algorithms that set companies apart are important to protect, companies also need to protect previous client list/ information along with possible marketing strategies, although the latter may all under algorithms that set them apart.
I think that inquiring about possible side effects with the usage of medication currently in production or discussing the materialistic properties that may occur within a device could be topics of discussion when talking to a consultant. In that case, when finalizing a consulting agreement, one should make sure the firm doesn't discuss anything about the product with others so that others could replicate the product to benefit them. They would also what to reassure that any niche and confidential ways that a product would be made would be kept under wraps.