Ensuring and protecting client’s intellectual property (IP) rights is highly critical for any outsourcing business. Softheme understands how important for our customers is to secure their IP rights, and this is why we put an emphasis on signing any requested non-disclosure agreements (NDAs) by our clients and NDAs with our employees. Below you will find an excerpt from our standard NDA signed between Softheme and our employees:

This non-disclosure agreement, hereinafter – “Agreement”, is signed and shall enter into force between Party 1, in the person of the representative of Softheme LLC, the Owner of the Confidential Information, hereinafter – “Owner”, and Party 2, hereinafter named as “Consultant”, who renders (or plans to render) services of informational-consultative nature to Softheme LLC.

In connection with business relations between Parties, the Owner and the Consultant realize the necessity for the Owner to disclose to the Consultant some confidential information which belongs to the Owner; to be used for the sole purpose of planning and execution of business activities; and protect confidential information of this sort (hereinafter – “Commercial Secret”) from unauthorized use and disclosure.

1. Subject Matter of the Agreement

1.1. In accordance with the Civil Code of Ukraine, the commercial secret in this Agreement refers to information which is confidential in the sense that it integrally or in some form or aggregation of its components is unknown or is not immediately available to individuals who usually deal with the kind of information it refers to; therefore has commercial value and has been a matter of measures adequate to current circumstances with regards to protection of its confidentiality taken by the individual who controls this information legally (a. 505 CCU).

The following details shall be referred to this kind of information:

1. general methods of production management in software development and organization of labor in the Company;
2. Company structure, its management, hierarchy, personal data of consultants, employees and management of the Company;
3. development plans of the Company;
4. negotiations that are being held or will be held by the management of the Company;
5. investment programs, technical-economic rationale, investment plans;
6. external and internal data about current partners and potential clients of the Company, commercial liaisons;
7. terms of contracts, agreements – both closed and projected; also texts and terms of agreements as well as the facts of their negotiation, terms of payments and information about performance of contracts;
8. methodologies of price calculation and principles of price formation, structure of prices, cost of production of software product, calculation of production expenditures, level of revenue;
9. property status; value of primary facilities; turnovers;
10. banking and financial operations, balance of banking accounts of the Company;
11. specifics of international payments between the Company and foreign organizations;
12. level of profits and revenues, credit status (assets and liabilities); balance;
13. credit volumes, sources and conditions;
14. financial conditions, reputation and other data that measures the level of reliability of the Company;
15. general information about the efficiency of the Company operations as a whole;
16. terms of contracts between the administration of the Company and consultants and employees;
17. payment for labor, bonuses, supplemental payments and compensations.

1.2. The special parts of the commercial secret in accordance with this Agreement are:

- characteristics of software product production:

- any kind of information about the projects that are being elaborated in the Company, technologies and algorithms that are being used or have been used during the elaboration of the projects;
- financial, analytical information about the projects that are being elaborated in the Company;
- technical information about the projects that are being developed in the Company, namely:

1. technical tasks;
2. prototypes;
3. programming code;
4. programming code of satellite programs and satellite programs themselves;
5. diagrams, models of program architecture and its components;
6. materials of a project;
7. databases;
8. design layouts;
9. circulars and other source materials provided by client for project development.

- testing documentation:

1. data about the tested programs;
2. information about systems of error reporting;
3. repositories, systems of code control;
4. systems of task reporting;

- information and access passwords to internal and external resources of the Company;
- access data to the servers of clients;
- marketing research, technologies and results of their conduction;
- any databases and other data stores.

1.3. Commercial secret can also refer to any other information not specially mentioned in articles 1.1 and 1.2 of this Agreement but such that corresponds to the general definition of commercial secret.

1.4. Commercial secret does not refer to information defined by the resolution No. 661 of the Cabinet of Ministers of Ukraine from August 9, 1993 “On specification of data that does not constitute commercial secret”:

1. information accordant to all established forms of state reporting;
2. data necessary for verification of calculation and payment of taxes and other mandatory payments;
3. information about quantity and structure of employees, their salaries as a whole and as per profession and position; as well as availability of job vacancies;
4. documents confirming payments of taxes and mandatory payments;
5. information about environment pollution, violation of safe working conditions, selling of products harmful for health, as well as other violations of the Law of Ukraine and levels of losses caused by these actions;
6. information that is subject to disclosure under the effective legislation.

2. Obligations

The Consultant agrees that:

2.1. All data that constitutes commercial secret under this Agreement and which came to notice of the Consultant as a result of cooperation with the Owner is confidential.

2.2. All information that constitutes commercial secret and is obtained as a result of cooperation with the Owner in the form of programs, letters, reports, notes, photographs, pictures, website designs, in corporeal or incorporeal form, is the private property of the Owner under this Agreement.

2.3. Intellectual property rights on project elaborations, technologies and algorithms used for project development are the private property of the Owner.

2.4. Consultant does not acquire any rights on intellectual property rights of the Owner.

The Consultant shall:

2.5. Use information obtained as a result of cooperation with the Owner only for the purpose of this cooperation.

2.6. Not disclose information that constitutes commercial secret of the Company in the duration and upon completion of the cooperation with the Owner.

2.7. Prevent reckless disclosure and protect information that constitutes commercial secret of the Company and that has come to notice of the Consultant as a result of cooperation with the Owner from any entrenchments and attempts to disclose the information by third parties.

2.8. Immediately inform the Owner about attempts of third parties to obtain information about the commercial secret of the Company.

2.9. Immediately inform the Owner about the loss or lack of carriers of commercial secret, documents, keys, stamps and about other facts that may cause disclosure of the commercial secret of the Company; as well as about causes and conditions of possible leakage of information that constitutes commercial secret of the Company.

2.10. Not disclose any data about projects that are being elaborated, technologies and algorithms that are used or have been used during the development of projects; financial, analytical and technical information about projects that are being elaborated, have been elaborated or are projected for development; documentation on testing, information about access data to external and internal resources of the Company and servers of clients and other data that constitutes commercial secret of the Company with the listing of which the Consultant is acknowledged and which can be entrusted to the Consultant or come to his/her notice during the cooperation with the Owner.

2.11. Not use commercial secrets of the Owner participating in any activities that can do harm to the enterprise, not provide consultations to outside physical and juridical bodies on the basis of or using information that constitutes commercial secret of the Owner.

2.12. After the termination of cooperation the Consultant undertakes to return all data obtained during cooperation with the Owner in the procedure of execution of this Agreement on material carriers as well as on copies on demand.

2.13. The Consultant was notified that under the Law of Ukraine disclosure of information that constitutes commercial secret may cause civil, administrative and criminal responsibility (article 17, 18, 19, 21, 24, The Law of Ukraine “On protection from unfair competition” from June 7, 1996 No. 236/96-VR (d), by the third part of the article 164-3 of the Code of Ukraine on Administrative Violations, a. 231, 232 of the Criminal Code of Ukraine) in the form of:
– confinement;
– monetary fine;
– obligation of compensation of losses to the enterprise (losses from lost advantage and moral damage);
– other penalties.

3. Agreement duration

3.1. This Agreement shall become effective at the moment of signing by the Parties and is effective in duration of the cooperation of the Parties and in duration of 3 (three) years after its termination.

4. Specific terms

4.1. All amendments to this Agreement are effective only if they are recorded in writing and signed by both Parties.

4.2. In case of disputes arising on this Agreement, the Parties shall assume all possible measures to settle disputes by means of negotiations. In case of unsolvable contradictions between Parties, the dispute is the subject to the final solution in the Court under the Law of Ukraine.

4.3. This Agreement is settled on three pages in two copies, with one copy for each Party and with each copy having the same legal force.

In conclusion, we would like to suggest to be cautious and stay away from companies who don’t pay attention to protecting their intellectual property and IP rights of their customers. We wish you success in choosing your software outsourcing vendor.

Sincerely,

Softheme team

See also: The Growing Threat of Outsourcing Fraud
Defining Stakeholders for a Project

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