Samsung Electronics, while in the process of developing a next-generation smartphone, has entered into a series of non-disclosure agreements (NDA) with its subcontracts. The aim is to prevent the leakage of information related to its new products amid intensifying patent competition with Apple over design and product specification.
According to an industry source on January 13, the Korean electronics giant recently signed NDAs with both old and new subcontractors clearly stating amounts of compensation in the range of hundreds of millions to billions of wons. A key part of those agreements is the demand for prevention of information leakage regarding Samsung’s new products under development.
Amounts of compensation differ depending on the size of damage incurred to the Korean firm as a result of disclosure by a subcontractor. A small damage resulting from media exposure would lead to compensation amount as specified in the NDA. A subcontractor which divulged highly confidential information such as core specification, functions, and the timing of release will be obliged to pay the full amount of damage to Samsung.
One source familiar with the industry said, “Samsung Electronics signed an NDA specifying compensation of up to 1 billion won with a subcontractor,” adding “Though the amount of compensation is not much different from the one under a typical NDA, the deal gave added focus to items related to information security.”