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Is a person or company disclosing confidential information? Is a person or company disclosing confidential information?Last Update August 5th, 2024
Trade Secret Agreement
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Table of Contents:An NDA (non-disclosure agreement) is a legal agreement between two parties on the use of confidential information. There are two main parties who are usually involved with an NDA agreement, ‘the owner’ of the data and ‘the recipient’.
A generic NDA will require the recipient of the information to keep it secret and prevent the data from being shared.
It not only allows the owner to restrict the recipient from disclosing the information but also obliges the receiving party to ensure that it is properly protected and safe from accidental leaks.
One of the parties that can form an NDA agreement is the federal government. Completing an NDA with the government must follow the Code of Federal Regulations (48 CFR § 227.7103-7).
An NDA can also be known as a:
Note: You can find out more about what an NDA is and what it involves, in our NDA definition.
There are a few purposes of these essential legal documents.The importance of a Non-Disclosure Agreement is that it permits the use of one or more types of confidential information under a number of conditions.
Most commonly these stipulations will appear in an employee non-disclosure agreement. This means that company staff is permitted to access the information to perform their work duties and that they agree not to share private information publicly.
However, NDAs can be used more broadly than that across a number of different circumstances. These may include:
Be aware, however, an NDA cannot be used to protect against information that is already publicly available. It also cannot prevent the disclosure of information not explicitly detailed by the document and data that is uncovered independently of the owner’s distribution.
NDAs will often vary depending on the necessities of the business or individual. Another factor is that data could be exchanged between all parties involved, rather than just simply passed from owner to recipient.
Whichever case applies, this will affect the type of NDA you end up creating.
There are three main types of NDAs that are used by individuals and businesses. These include:
A violation of an NDA occurs when one of the parties leaks information that is meant to stay confidential.
There are certain actions that you can take to stop this behavior.
The party that had their information leaked should create a Cease and Desist order and send it to the other party.
This doesn’t necessarily mean that there will be any legal action. However, it prevents the other party from continuing to leak information.
If the person that leaked the information did so in more than 1 state, they could be charged in federal court. If that is not the case, then that party must face trial only in the state court.
You could also be awarded up to 5 million dollars or 3 times what was taken from you if the other party committed theft.
Writing your own NDA form is not as tricky a process as it may appear. However, you need to make sure that you include all the details necessary to make sure that your confidential information is properly protected.
To function as intended, a confidentiality agreement will need to include the following critical information:
As noted above, one of the most important details an NDA needs to clearly define is what kind of confidential information is being shared and legally binds the recipient to its protection. This kind of data could involve:
Follow these instructions to create a well-written Non-Disclosure Agreement.
The beginning of your document establishes who the parties are in the agreement. In a unilateral agreement, there are 2 types of parties:
In a mutual agreement, both are disclosing and receiving. This part gives information about the person or business involved.
This part explains that both parties want to begin a possible business opportunity of mutual interest. The opportunity may involve confidential information regarding products or data, and the receiving party cannot share this information.
The agreement must have the signatures of the parties and representatives. With the signatures, it becomes a legally binding document.
Using a pre-prepared NDA template can help speed up the process of writing your own document.
This can help by laying out the key elements you’ll need to successfully protect your confidential information by allowing you to add the specific details of your case to each essential section.
LawDistrict’s step-by-step form can help you through each part of the process. It will help you address the most important considerations on your document and create a professional and useable printable PDF of your NDA.
Any violation of a trade secret that is done in more than 1 state can be brought to trial in federal court.
If it is done in only a single state, you must check the laws of that state before proceeding with the legal process.
Refer to the table below to review the trade secrets act of your state.
| State | Statute |
|---|---|
| Alabama | § Title 8, Chapter 27 |
| Arkansas | § AS 45.50.910 – AS 45.50.945 |
| Arizona | § Title 44, Chapter 4 |
| California | § Title 7, Article 74 |
| Connecticut | § Title 35, Chapter 625 |
| Delaware | § Title 6, Chapter 20 |
| Florida | § Title 39, Chapter 688 |
| Georgia | § Title 10, Chapter 1, Article 27 |
| Hawaii | § Title 26, 482B |
| Idaho | § Title 48, Chapter 8 |
| Illinois | § 765 ILCS 1065 |
| Indiana | § Title 24, Article 2, Chapter 3 |
| Kansas | § 60-3320 – § 60-3330 |
| Kentucky | § 365.880 – § 365.900 |
| Louisiana | § 1431 – § 1439 |
| Maine | § Title 10, Chapter 302 |
| Maryland | § Title 11, Subtitle 12 |
| Massachusetts | § 15-266-30(4) |
| Michigan | § 445.1901 – § 445.1910 |
| Minnesota | § Chapter 325C |
| Mississippi | § Title 75, Chapter 26 |
| Missouri | § 417.450 – § 417.467 |
| Montana | § Title 30, Chapter 14, Part 4 |
| Nebraska | § 87-501 – § 87-507 |
| Nevada | § 600A |
| New Hampshire | § 350-B |
| New Jersey | § 56:15-1 – § 56:15-9 |
| New Mexico | § Chapter 57, Article 3A |
| New York | There is no law |
| North Carolina | § Chapter 66, Article 24 |
| North Dakota | § Title 47, Chapter 25.1 |
| Ohio | § 1333.61 – § 1333.69 |
| Oklahoma | § 85 – § 95 |
| Oregon | § 646.461 – § 646.475 |
| Pennsylvania | § 12, Chapter 53 |
| Rhode Island | § Chapter 6-41 |
| South Carolina | § Title 39, Chapter 8 |
| South Dakota | § Title 37, Chapter 29 |
| Tennessee | § Title 47, Chapter 25, Part 17 |
| Texas | § Title 6, Chapter 134A |
| Utah | § Title 13, Chapter 24 |
| Vermont | § Title 9, Chapter 143 |
| Virginia | § Title 59.1, Chapter 26 |
| Washington | § Title 19, Chapter 19.108 |
| West Virginia | § 47- 22 |
| Wisconsin | §134.90 |
| Wyoming | § 40-24 |
Before you start writing your own in-depth confidentiality agreement, it is useful to have a good idea of how your document will look. View our standard sample NDA template below to see how your text should appear once completed.
A Non-Compete Agreement is a document that’s similar to an NDA. They complete a similar function, but they are not identical.
Here are the differences and similarities between the 2 agreements.
| Non-Compete Agreement | Non-Disclosure Agreement |
|---|---|
| An employee cannot work for a competitor | Employees are able to work for competitors |
| Employees cannot give proprietary information | Employees cannot give proprietary information |
| Restricted in numerous states | Not restricted in any part of the country |
| Confined to employment | Not confined to any industry |
Employers can use both of these agreements to their advantage to prevent important information from getting out.
Concerning the privacy of your most important information, there is a document that you can use if your Confidentiality Agreement is violated.
If your Non-Disclosure Agreement was not respected by another party, you can use a Cease and Desist Letter.
This prevents the other party from continuing to break the agreement and if they do not, you can file a lawsuit.
In addition, other useful documents can be used in similar circumstances.
LawDistrict has information and templates to use for any of these legal circumstances.
If you’re still unsure regarding some details you’ll need to know before creating a comprehensive and legally water-tight NDA, don’t panic. We have found the answers to some of the most frequently asked questions to help make the process a little clearer.
Read on below to learn more about the ins and outs of these kinds of legal documents.
Yes, when you write an NDA and have it signed by both parties it is legally binding agreement as of that moment (or the dates specified when the agreement is to come into effect).
At that point onwards the recipient is legally liable for the protection of any and all of the confidential information that is shared with them by the owner under the form’s terms.
If you happen to break an NDA you could be sued by the owner. However, in order to do so, the owner must be able to demonstrate that you broke the terms written in the NDA form.
They will need to provide evidence of whom the information has been shared with, when the breach of confidentiality happened, and how it was carried out.
An NDA can last for as long or as short a time as is needed to ensure the protection of your confidential information. However, in most cases, the duration of an NDA will last between 1-5 years.
When you write your own document this will normally be outlined in the non-disclosure agreement form. When filling in LawDistrict’s online NDA template you will be prompted to specify the terms of disclosure, which will regulate how long the agreement will run for.
You are only a few steps away from your own Non-Disclosure Agreement (NDA)!
Download our professional examplesThis Non-Disclosure Agreement (this "Agreement") is made and entered into as of this day of _________ ("Effective Date"), between the Disclosing Party _________ (the "Owner"), of _________, and the Recipient _________ (the "Recipient"), of _________.
The Parties wish to explore a business opportunity relating to the following reason:
The Disclosing Party or Owner has requested, and the Recipient agrees that the Recipient will protect the confidential material and information that is to be disclosed between the Owner and the Recipient. Therefore, the parties agree as follows:
I. CONFIDENTIAL INFORMATION. The term "Confidential Information" means any information (including any and all combinations of individual items of information) disclosed by the Disclosing Party, be it a Person or a Company, to the Recipient, including any information disclosed prior to the Effective Date, either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, research, product plans, products, services, equipment, customers, markets, software, inventions, discoveries, ideas, processes, designs, drawings, hardware, formulations, specifications, product configuration information, marketing and finance documents, prototypes, samples, data sets, and equipment), whether or not designated as "confidential" at the time of disclosure. Confidential Information may also include information of a third party that is in the Disclosing Party's possession and is disclosed to the Recipient under this Agreement.
Confidential Information shall not, however, include the following: Any information which the Recipient can establish (i) was publicly known and made generally available in the public domain prior to the time of disclosure to the Recipient by the Disclosing Party, be it a Person or a Company; (ii) becomes publicly known and made generally available after disclosure to Recipient by Disclosing Party through no action or inaction of the Recipient; (iii) is in the possession of the Recipient, without confidentiality restrictions, at the time of disclosure by the Disclosing Party as shown by the Recipient's then-contemporaneous files and records kept in the ordinary course of business; or (iv) readily ascertainable or independently developed.
If the Recipient becomes legally compelled to disclose any Confidential Information, other than pursuant to a confidentiality Agreement, the Recipient will provide the Disclosing Party prompt written notice of such disclosure and will assist said Disclosing Party in seeking a protective order or another appropriate remedy. If the Disclosing Party waives the Recipient's compliance with this Agreement or fails to obtain a protective order or another appropriate remedy, the Recipient will furnish only that portion of the Confidential Information that is legally required to be disclosed; provided that any Confidential Information so disclosed shall maintain its confidentiality protection for all purposes other than such legally compelled disclosure.
II. PROTECTION OF CONFIDENTIAL INFORMATION. Non-Use, Non-Disclosure. Recipient agrees to all of the following: (i) To not copy any Confidential Information without prior written consent of the Disclosing Party or Owner; (ii) To not use any Confidential Information for any purpose except to evaluate and engage in discussions concerning a potential business relationship between Recipient and the Disclosing Party or Owner; (iii) To promptly notify the Disclosing Party or Owner if the Recipient understands that, or is conscious of, any possible unauthorized disclosure or use of the Confidential Information; (iv) To not disclose any Confidential Information to third parties or to employees of the Recipient, except to those employees who are required to have the information in order to evaluate or engage in discussions concerning the contemplated business relationship; (v) If applicable, the Recipient shall not reverse engineer, disassemble or decompile any prototypes, software or other tangible objects which embody the Disclosing Party's or Owner Confidential Information and which are provided to the Recipient hereunder; (vi) The Recipient recognizes that the Disclosing Party or Owner has developed and/or acquired Confidential Information after a considerable amount of time and efforts invested, making said Confidential Information valuable, distinguishable, unique and a considerable asset, which is the property of the Disclosing Party or Owner and must be protected from any possible type of disclosure by the Recipient.
III. MAINTENANCE OF CONFIDENTIALITY, UNAUTHORIZED DISCLOSURE OF INFORMATION AND REMEDIES. (i) The Recipient agrees that it shall take all reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of the Confidential Information. (ii) Without limiting the foregoing, the Recipient shall take at least those measures that the Recipient takes to protect its own most highly Confidential Information and shall have its assistants, partners, or employees who have access to Confidential Information sign a nonuse and Non-Disclosure Agreement in content substantially similar to the provisions hereof, prior to any disclosure of Confidential Information to such persons. (iii) The Recipient shall not make any copies of Confidential Information unless the same are previously approved in writing by the Disclosing Party or Owner. (iv) The Recipient shall reproduce the Disclosing Party's proprietary rights notices on any such approved copies, in the same manner in which such notices were set forth in or on the original. (v) The Recipient shall immediately notify the Disclosing Party or Owner in the event of any unauthorized use or disclosure of the Confidential Information. (vi) The Recipient agrees that any violation or threatened violation of this Agreement will cause irreparable injury to the Disclosing Party or Owner, entitling said party to obtain injunctive relief to prevent the Recipient from completely or partially disclosing the Confidential Information, in addition to all legal remedies, including claims for losses and damages.
IV. NON-CIRCUMVENTION AND NON-SOLICITING. Notwithstanding anything to the contrary in this Agreement, the Recipient agrees for itself and, if applicable, its employees, its affiliates, and any other related parties that, for a period of _________, it will not engage in any action, attempt to do business with any business contact or third party of the Disclosing Party, that will bypass, circumvent, avoid or obviate the rights of the Disclosing Party or Owner, either directly or indirectly, to avoid the payment of fees, participation, equity or commissions to the Disclosing Party, whether by the Recipient or any other third party, in connection with any project, transaction or information introduced to said Recipient by the Disclosing Party. If such circumvention occurs, the Owner will be entitled to any commissions due pursuant to this Agreement or relating to such transaction.
V. RETURN OF CONFIDENTIAL INFORMATION. Upon the written request of the Disclosing Party or Owner, the Recipient shall return all documents and other tangible objects, which in any way relate to the Disclosing Party's Confidential Information, or any other type of documents representing Confidential Information, and all copies thereof which are in the possession of the Recipient shall be and remain the property of the Disclosing Party or Owner and shall be promptly returned to said party upon its request. In no event shall the Recipient have the right to use or exploit Residuals for any purpose after the return of Confidential Information to the Disclosing Party or Owner. As used herein, "Residuals" shall mean ideas, information, and understandings retained in the memory of the Recipient or Recipient's employees as a result of their review, evaluation, and testing of the Confidential Information.
VI. NO OBLIGATIONS BETWEEN THE PARTIES. Nothing herein shall obligate the Disclosing Party or Recipient to proceed with any transaction between them, be it the purchase of an item or any kind of service from the other party and each party reserves the right, in its sole discretion, to terminate the discussions contemplated by this Agreement concerning the use or commercialization of any products or business opportunity. Nothing in this Agreement shall be construed to restrict the Disclosing Party's use or disclosure of its own Confidential Information. The Agreement does not create contractual obligations of any kind, including, but not limited to, agency, partnership or joint venture. Thus, the purpose of this Agreement is merely to afford the parties' protection against misuse of Confidential Information exchanged during the exploration of the potential relationship.
VII. NO WARRANTY. ALL CONFIDENTIAL INFORMATION IS PROVIDED ON AN "AS IS" BASIS. THE DISCLOSING PARTY OR OWNER MAKES NO WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING THE ACCURACY, COMPLETENESS OR PERFORMANCE OR WITH RESPECT TO NON-INFRINGEMENT OR OTHER VIOLATION OF ANY CONFIDENTIAL INFORMATION OR INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY OR OF THE RECIPIENT, AND HEREBY DISCLAIMS ANY AND ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. IN NO EVENT SHALL THE DISCLOSING PARTY OR OWNER BE LIABLE FOR ANY KIND OF DAMAGES THAT OCCUR IN CONNECTION WITH OR ARISING OUT OF THE PERFORMANCE OR USE OF ANY PORTION OF THE CONFIDENTIAL INFORMATION. The Disclosing Party or Owner does not represent or warrant that any product or business plans disclosed to and shared with the Recipient will be marketed or carried out as disclosed, or at all. Any actions taken by the Recipient in response to the disclosure of the Confidential Information shall be at the full and sole risk of the Recipient.
VIII. LIMITED LICENSE TO USE. The Recipient recognizes that nothing in this Agreement is intended to grant said party any rights under any patent, mask work right or copyright of the Disclosing Party, nor shall this Agreement grant the Recipient any rights in or to Confidential Information except as expressly set forth herein. The Recipient will not gain any intellectual property rights under this Agreement except the limited right to use the Confidential Information as set forth above.
IX. INDEMNITY. Each party hereby agrees to indemnify, defend, and hold the other party, as well as its officers, agents, affiliates, representatives, or employees harmless from any and all claims, demands, costs, liabilities, losses, expenses, and damages (including reasonable attorneys' fees, costs, and expert witnesses' fees) arising out of or in connection with any claim that, taking the claimant's allegations to be true, would result in a material breach of any duty whatsoever by the indemnifying party of any of its warranties and covenants.
X. ATTORNEY'S FEES. In any legal action between the parties concerning this Agreement, the prevailing party shall be entitled to recover and reclaim reasonable attorney's fees and costs.
XI. TERM. This Agreement shall survive for _________ from the Effective Date or until the Disclosing Party or Owner sends the Recipient a written notice explicitly stating that all Confidential Information disclosed hereunder becomes publicly known and made generally available through no action or inaction of the Recipient.
XII. MISCELLANEOUS PROVISIONS. This Agreement shall bind and inure to the benefit of the parties. This Agreement will be interpreted and construed in accordance with the laws of the _________, without regard to conflict of law principles. This Agreement shall not be assignable to a third party by either party. Neither party may delegate its duties under this Agreement without the prior written consent of the other party. This Agreement contains the entire Agreement between the parties with respect to the Opportunity and supersedes all prior written and oral agreements between the parties regarding the business opportunity. If a court or other body of competent jurisdiction finds any provision of this Agreement, or portion thereof, to be invalid or unenforceable, such provision will be enforced to the maximum extent permissible so as to effect the intent of the parties, and the remainder of this Agreement will continue in full force and effect. No provision of this Agreement may be waived except by a writing executed by the Party against whom the waiver is to be effective. A party's failure to enforce any provision of this Agreement shall neither be construed as a waiver of the provision nor prevent the Party from enforcing any other provision of this Agreement. No provision of this Agreement may be amended or otherwise modified except by a writing signed by the parties to this Agreement.
XIII. WHISTLEBLOWER IMMUNITY. This Non-Disclosure Agreement recognizes the immunity granted to the Recipient under the Defend Trade Secrets Act, which establishes in § 1833(b) (1) that individuals will have civil or criminal immunity for the disclosure of a trade secret that: (a) is made "in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney" and solely for "the purpose of reporting or investigating a suspected violation of law"; or (b) is made in a complaint or document "filed in a lawsuit or other proceeding" so long as the filing is made under seal.
XIV. SIGNATORIES. Each Party warrants that the person indicated on the signatory line to this Agreement has all authority necessary to bind the Party and is the appropriate person to sign this Agreement. Each Party warrants that the present Agreement shall be realized by _________ and _________.
OWNER:
By: _______________________________
_________
RECIPIENT:
By: _______________________________
_________
