Post on 02-Mar-2018
7/26/2019 Trade Secrets Agreements v. NDAs
1/22
Trade Secret agreements
v.NDAs
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
2/22
In order to protect these secrets, there are several common ways
that businesses use to protect these secrets.
These include using a patent, a non-competing agreement, a
non-solicitation agreementand a non-disclosure agreement(NDA).
Each of these legal tools can produce very different results.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
3/22
The patent
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
4/22
With a patent, you're establishing a monopoly on a proprietary item
but only for a limited amount of time.
Not everything can be patented.
When filling for a patent, you're required to reveal all details about
your secretand this is made available to the public.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
5/22
The trade secret
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
6/22
A trade secret has no time limitationand can last forever.
It remains a trade secret indefinitely as long as you can prove that
the secret continues to possess commercial value, confers some
sort of economic benefit to you and you have made an effort to
keep it a secret.
So, besides taking measures to protect your trade secret, what
else can you do?
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
7/22
The NDA
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
8/22
The non-disclosure agreement - sometimes shortened as "NDA"
- is also known as a trade secret agreement or a confidentiality
agreement.
An NDA is a legally binding contractbetween parties that
requires them to keep certain information confidential.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
9/22
Define trade secrets and confidential
A trade secret is treated differentlyfrom merely confidential
information by the courts.
On top of providing such a definition in your legal agreement,
you should develop a practice of clearly marking information
that you disclose as either "Confidential" or "Trade Secret" to
avoid confusion.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
10/22
Indefinite period
In an ordinary NDA, it's advisable that you specify a defined period
of time for which the confidentiality is to last for.
This is to avoid any potential risk of a courtdeclaring that an NDAis too restrictive.
However, this should not applywhen it comes to trade secrets.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
11/22
Here are example clauses from Coca Colas Agreement on
Confidentiality, Non-Competition and Non Solicitation(1) that
demonstrate the difference in the amount of time confidentiality
is expected for information that's considered a trade secret and
what's merely confidential:
(1) http://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitation
http://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitationhttp://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitationhttp://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitationhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
12/22
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
13/22
Jurisdiction
It's also important to specify what jurisdiction will apply to the NDA
you'll draft and send to be signed in the event of the need for court
intervention.
An example of a clause that provides for jurisdiction can be found
in an NDA from Harvard Business School(2):
(2) http://www.hbs.edu/newventurecompetition/Pages/default.aspx
http://www.hbs.edu/newventurecompetition/Pages/default.aspxhttp://www.hbs.edu/newventurecompetition/Pages/default.aspxhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
14/22
(b) The validity, construction and performance of this Agreement shall be governed
and construed in accordance with the laws o _____________________ state applicable to connects
ade and to be wholly performed within such state, without giving effect to any conflict of laws
rovisions thereof. The Federal and state courts located in _____________(state) shall have sole and
exclusive urisdiction over any disputes arising under, or in any way connected with or related to, the
terms o this Agreement and Receiving Part, i consents to personal urisdiction therein; and ii waives
the right to raise orum non convenlonsor any similar objection.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
15/22
Termination of relationship
You should also specify what you wish the other party to do with
any confidential information when your contractual relationship
ends or they leave your business.
You could require that the other party returns all originals and
copiesof the information back to you or destroy them within a
certain period of time and retain no other records or copies.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
16/22
NDAs with Non-Compete,
Non-Solicitation
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
17/22
A non-compete agreement is a contract that prevents the other partyfrom later on competing with youfor a specific period of time and in
a certain geographic location.
A pure NDA normally only restricts unauthorized disclosures over
confidential information but it doesn't stop the use of the confidentialinformation once it has been disclosed.
One of the downsidesof a non-competing agreement though is that it
has to be reasonableas courts loathe to uphold something that comes
across as an unfair restraint on commercial competition.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
18/22
An example of a combined non-disclosure, non-compete and
non-solicitation clauses can be found again in the Coca Colas
Agreement on Confidentiality, Non-Competition and Non
Solicitation(3):
(3) http://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitation
http://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitationhttp://www.wikinvest.com/stock/Coca-Cola_Company_(KO)/Agreement_Confidentiality_Non-competition_Non-solicitationhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
19/22
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
20/22
Using the NDA in patents talks
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
21/22
A patent, and related business talks around a patent, can also be
combined with an NDA.
However, a patent could be paired very well with a trade
secretin certain circumstances.
You only have to reveal secrets at the time of the filing of your
patent application but not while the patent is in force.
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDFhttps://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF7/26/2019 Trade Secrets Agreements v. NDAs
22/22
https://everynda.com/?utm_source=Article-11&utm_medium=PDF&utm_campaign=Presentations-PDF