Guest article

What you need to know before meeting potential users of your technology

By Thomas L. James

- Last updated on GMT

Before a first meeting with potential users of your nutraceutical
technology, it is very important to have such persons or entities
execute appropriate confidentiality, non-disclosure,
non-circumvention, and non-solicitation agreements so that you will
be able to conduct the most open and productive discussions with
them about your technology.

The purpose of these agreements is to protect your technology and company. Failure to execute these agreements prior to your first meeting with potential users of your technology could result in very costly and detrimental legal problems in the future. ​Prior to engaging in any discussions with potential users of your nutraceutical technology, you need to have such persons or entities execute proper confidentiality, non-disclosure, non-circumvention, and non-solicitation agreements. These agreements can be in separate forms or aggregated into one comprehensive agreement. The subject matter of each of these agreements serves a different but very vital purpose for the benefit and protection of your company and its technology. The traditional confidentiality and non-disclosure agreement usually only restricts a party from disclosing or using the confidential information of the other party. Additional non-circumvention provisions restrict the other party from circumventing (going around) the disclosing party to get into the business of and/or becoming a competitor of the disclosing party other than from the use of the confidential information of the disclosing party. The non-solicitation provisions restrict the other party from soliciting employees, consultants, and business contacts/prospects of the disclosing party from leaving or diminishing their relationship with the disclosing party. So, in the aggregate, these differing agreements (or differing provisions within one comprehensive agreement) serve to cohesively protect your company and your technology. In the further event that your company might provide protected and/or sensitive ingredients/materials to a potential user of your technology in the future, it is also advisable to provide such party with a material transfer agreement ("MTA"), either before your first meeting or at least prior to providing such material. Your form of MTA must clearly limit the scope of the use of the material that you provide to such party to be used only for the limited purpose of an evaluation of such material for the defined purpose of determining whether the user wants to engage in a business transaction with your company. The MTA must also clearly state that all intellectual property developed or discovered during such evaluation of your material will be solely owned by your company. ​In summary, the most important point to remember is that the proper protective documents need to be put into place prior to the first meeting with a potential user of your technology in order to adequately protect your company and its technology. If you wait to execute such agreements after your first meeting, then it might be too late to protect whatever has been disclosed in such first meeting, which could lead to very costly and detrimental legal problems in the future. Thomas L. James is a partner in Foley's Washington, D.C. office. He is a member of the firm's Transactional & Securities and Private Equity & Venture Capital Practices, as well as the Life Sciences Industry Team. He can be contacted at 202.295.4012 or via email at tjames@foley.com.

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