Legal Question in Intellectual Property in New York

Non disclosure agreement

I have two companies agreeing to enter into a Non-disclosure agreement. One is a European company, one is an American company. Both are balking at the part saying the agreement will be governed under the laws of the other country. Is there a standard for agreements between international companies?


Asked on 9/05/08, 1:01 pm

4 Answers from Attorneys

Kristen Browde Browde Law, P.C.

Re: Non disclosure agreement

Not really.

The question that's at the base of this is which company has the information that is not to be disclosed. It is that company that would most likely be bringing an action if there were an unauthorized disclosure - and that company would want the access to their local courts and the benefit of their local laws.

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Answered on 9/05/08, 1:04 pm
Johm Smith tom's

Re: Non disclosure agreement

Yes the standard is for the company with the most influence to make the other company use the law they choose. There are several similarly important components of the contract you can use for bargaining, but it mainly depends on the facts.

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Answered on 9/05/08, 1:39 pm
Kaiser Wahab Wahab & Medenica LLC

Re: Non disclosure agreement

Unfortunately, there is no hard and fast "standard" that you can refer to. The choice of law provisions of any type of agreement are usually the most susceptible to the ebbs and flows of negotiation (leverage, focus of interests, etc.) With regard to an answer by another practitioner, the factors driving the negotiation would be access to local courts, practitioners, and laws.

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Answered on 9/05/08, 2:36 pm
Gerry Elman Elman Technology Law, P.C.

Re: Non disclosure agreement

What each of the other respondents has said is generally true. I would add the following thoughts:

Be sure that the parties understand that "choice of governing law" is not the same as "consent to jurisdiction." For a contract between a U.S. company and a German company, for example, some folks might not understand that the law books used to interpret the contract could be German law but the dispute might be litigated in the U.S.A. Or it might be made subject to arbitration in either the U.S.A. or Germany, or somewhere else, for that matter.

And it's always possible to resolve the matter by omitting a choice of law clause from the agreement and letting the chips fall where they may when and if there's a dispute. In that event, a lawsuit might eventuate in either jurisdiction, and the court would apply the principles of "conflicts of laws" to decide whose law books to consult.

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Answered on 9/05/08, 5:06 pm


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