Insights

Checklist: Key Checks Before Signing an NDA Involving AI

2 min read · Editorial oversight: Avv. Federico Papa

This checklist is intended for legal professionals immediately prior to the execution of a non-disclosure agreement (NDA). It aims to ensure that the final agreement complies with statutory validity requirements and effectively protects trade secrets.

In brief

The AI NDA operational guide requires verifying party identity (Art. 1429 ICC) and aligning trade secret definitions with Arts. 98 and 99 IIPC. A penalty clause under Art. 1382 ICC pre-estimates damages from data leaks, simplifying the burden of proof. Pursuant to Art. 1322 ICC, the agreement must pursue legitimate interests to avoid contractual imbalances. Key requirements include post-contractual obligations, specific data deletion protocols from AI models, and the verification of signing authority to ensure legal effectiveness.

1.
Verification of the Parties' Identity
Ensure that the identifying details of both the AI provider and the owner of the information are accurate: an error regarding the identity of the other contracting party constitutes grounds for voidability only if it was decisive to consent pursuant to Art. 1429, no. 3, of the Italian Civil Code, or if it affects the enforceability of the contractual bond.
Related practical guide: How to draft an NDA (non-disclosure agreement) using AI
2.
Scope of Confidential Information (Arts. 98 and 99 IIPC)
Ensure that the definition of trade secret encompasses the statutory requirements of secrecy, economic value, and reasonable protective measures under the Italian Industrial Property Code (IIPC): a lack of precision in defining the subject matter risks precluding legal protection.
3.
Penalty Clause (Art. 1382 ICC)
Verify the insertion of a penalty clause (pursuant to Art. 1382 of the Italian Civil Code) for breach, pre-estimating damages: without such provision, proving loss arising from data leaks via AI systems is extremely complex.
4.
Assessment of Legitimate Interest (Art. 1322 ICC)
Ensure that the agreement pursues interests worthy of protection under the legal system (Art. 1322 ICC): excessively one-sided clauses favoring the AI provider could be challenged or deemed invalid.
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5.
Duration of Post-Contractual Obligations
Ensure that the confidentiality obligation survives the termination of the contractual or technical relationship: the immediate expiration of confidentiality duties would leave the data freely accessible and usable by AI models.
6.
Carve-Outs and Exclusions from Confidentiality
Verify that information excluded from the confidentiality obligation (e.g., information already in the public domain) is clearly defined: this prevents potential disputes over data lacking confidential character.
7.
Data Deletion and Return
Ensure that explicit provisions govern the deletion or return of data and the removal of models from AI databases upon contract termination: uncontrolled data persistence would frustrate the core purpose of the NDA.
8.
Authority and Signing Powers
Ensure that the signatory possesses the necessary legal representation powers to bind the corporate entity: execution by an unauthorized person renders the agreement ineffective.

Editorial oversight: Avv. Federico Papa·ICAM

Frequently asked questions

What happens if Art. 1382 of the Italian Civil Code is omitted from the NDA?

In the event of a breach of confidentiality, the aggrieved party bears the burden of proving strict evidence of the actual loss suffered and its exact amount, making the recovery of damages highly complex and uncertain.

What is the risk of an NDA without references to Arts. 98 and 99 IIPC?

The information risks failing to qualify as protected trade secrets, thereby forfeiting the enhanced statutory remedies provided by the IIPC in the event of unauthorized use through AI systems.