Technology and intellectual property (IP) are often the main, or even the only, business advantage of technology companies or businesses. It is not always possible to protect the advantage by registering a patent, which in most cases will only cover part of the technology.

Still some transactions require disclosing technology / IP. Beyond the exposure itself, today's customer or partner might become tomorrow's competitors.

​

Loss of intellectual property could spell the end of your commercial advantage, force you into a price war (Red Ocean) and lead to financial losses and even collapse. Such a loss is one of the biggest risks in transactions and technology businesses and in particular high-tech ventures.

In order to reduce the risk to a minimum, you need to determine contractually how the party getting access to technology, may and may not use it:

 

 

Limitations on Use of Technology / IP - Confidentiality Agreements

Preparing to engage in negotiations, parties will often sign a confidentiality arrangement, commonly referred to as a Non-Disclosure Agreement (or NDA for short). NDAs would usually prohibit any use of confidential information not required for the negotiation itself. Similar mechanisms are many times incorporated into broader contracts.

​

In the world of technology and high-tech, NDAs are so common and "routine" that very often they are signed without legal examination. Consequently, confidential information definition, terms that exempt from confidentiality obligations, IP dispute resolution and many other crucial elements, are disregarded. As a result, extremely valuable business assets may not be covered by the protection that the NDA is intended to provide. Legally you might be worse off in such situations than you would have been if your technology / IP had not been "protected".

 

 

How technology / IP May Be Used - Licensing Agreements

Many transactions involve technology / IP transfer. An NDA, even if signed, is limited to the pre-transaction stage. The NDA restrictions on "unagreed use" of the technology / IP might not be relevant after the transaction itself confers rights of use.

Therefore, you must determine how a technology / IP may be used (licensed use), and not what uses are prohibited. Just to mention very few of the countless parameters that a license may set: the license period, its scope (territory? Market segment? Industry?), the purpose of use (Support? Maintenance? Sale? Development?) and the license transferability (to end users, for example?).

​

A good license will also provide for IP dispute resolution, the governing law, the competent instance, the venue etc.

 

Adv. Erez Modai - Background and Experience in Protecting Your Technological Assets

Over his career, Adv. Modai has handled hundreds of NDAs and technologies and IP contractual confidentiality arrangements. When adv. Modai served as Oracle's legal advisor for Israel and other countries, he handled, in addition to NDAs, countless IP licensing arrangements and models: to  end users (including in giant companies and entire governments), to entities that sell the technology and / or provide services to users, to companies that integrate the technology into their products in its entirety, and many others.

Adv. Modai has published a book (Heb.) on confidentiality agreements, and has given lectures on this topic in conferences and well-known establishments.

​

For advice on protecting your technology and / or IP, contact Erez Modai without delay.