The Value of an NDA

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Andrew Rapacke
Andrew Rapacke

As each growing business quickly realizes, Intellectual Property (IP) will often be the company’s most valuable asset. The Atomic Café, a coffee shop and bean roasting company, may have learned this lesson too late as evinced by a new lawsuit between themselves and the owners of LeanBox, a food and beverage vending machine supplier.

A typical business utilizes several different types of IP: patents, trademarks, copyrights, trade secrets, etc. Unlike patents, trademarks, and copyrights which can be registered at state and federal intellectual property offices to ensure protection, trade secrets are afforded their protections by a company’s ability to maintain their secrecy. Here, Atomic Coffee entered into negotiations with LeanBox for a new business venture, and in doing so, Atomic Coffee disclosed their secret methods and recipes for making their proprietary cold brew coffee.

Although it is common to disclose features of an invention before a business deal is finalized, the disclosing party may be without recourse if the receiving party does not maintain the secrecy of those trade secrets. Once a trade secret becomes public, it is no longer protected. Consequently, parties should always consider whether what they are disclosing is confidential or a trade secret that cannot be made public and if so, whether they should enter into a non-disclosure agreement to reinforce the same and provide contractual remedies for breach.

Because Atomic Coffee never obtained a formal signed agreement, they will have an uphill battle to enforce their trade secrets against LeanBox.

Source – The Salem News

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