Confidential Information: Code
NDA
Table of Contents:
Ownership Rights
Limited License
Confidentiality Period
Confidential Information: Code
Ownership Rights
The transaction to which the parties’ NDA is intended to apply may on occasion include the disclosure of software (aka code). Code is commonly considered proprietary as well as confidential information. Usually, a party’s code will be provided in object-code format only (not human-readable source code). In any event, the code owner will want to ensure that its proprietary rights to disclosed code is not waived or forfeited.
The following exemplars contain terms prohibiting reverse engineering of code, including decompiling, disassembling or converting the object code into source code (additional terms addressing reverse engineering are dealt with more generally and comprehensively in the section entitled “Reverse Engineering”).
Exemplar N4D-1
The Receiving Party shall hold all Confidential Information disclosed hereunder in confidence, shall use such Confidential Information only for the Permitted Purpose, shall reproduce such Confidential Information only for such purpose, shall restrict disclosure of such Confidential Information to its employees, directors and officers (including in each case, those of its Affiliates), with a need to know for the Permitted Purpose (and who are bound by confidentiality terms substantially similar to those in this Agreement), and shall not disclose such Confidential Information to any third party (other than Affiliates) without prior written approval of the other party. The Receiving Party shall not attempt to (1) reverse engineer, decompile, disassemble or reverse translate any Confidential Information provided by the Disclosing Party, (2) attempt to discover the source code or composition of or trade secrets in any such Confidential Information, (3) analyze the Confidential Information for composition or structure or (4) circumvent any technological measure that controls access to such Information.
Exemplar N4D-2
The recipient Party agrees not to assert any claim of title or ownership to the Confidential Information or any portion thereof. If Confidential Information consists of computer software disclosed in object code form, the recipient Party shall not, and shall not permit any other party, to reverse engineer, reverse compile, or disassemble such object code, or take any other steps to derive a source code equivalent thereof.
Exemplar N4D-3
The parties agree that, unless the disclosing Party gives its prior written authorization, the receiving Party shall:
(i) not use the Confidential Information disclosed by the disclosing Party for any purpose other than for the Purpose;
(ii) not disclose the Confidential Information to any third party other than those employees whose duties justify the "need-to-know" and who are bound by a confidentiality duty which is no less restrictive than this agreement. The receiving Party is responsible for any breach made by such third party as it had made the breach under this Agreement;
(iii) protect and ensure its participating associates will protect the Confidential Information by using the same degree of care, but no less than a reasonable degree of care, to prevent the unauthorized use, dissemination or publication of the Confidential Information as the receiving Party uses to protect its own confidential information of a similar nature;
(iv) not attempt to decompile, disassemble, reverse engineer or use any other means to gain Confidential Information of any prototype, sample, software or other tangible object or to gain access to the physical or circuit designs or source code of any software disclosed by the disclosing Party to the receiving Party;
(v) provide reasonable prior notice to the disclosing Party and shall request a protective order if the receiving Party is required to reveal the Confidential Information under a subpoena, court order or other operation of law;
(vi) comply with all applicable export laws.
Limited License
The code owner will also want to make clear that the disclosure of code under the NDA grants the recipient only a limited and temporary license to use the code. The use restrictions applicable to code should be more fully addressed in a dedicated license agreement:
Exemplar N4D-4
In the event that the Discloser provides any Information in the form of program code and its associated documentation (a “Program”) for use by the Recipient under this Agreement, such use shall be subject to the terms of an appropriate license to be agreed by the parties in addition to the terms of this Agreement; and in the event (but to the extent only) of any conflict between the provisions of this Agreement and those of any such license, those of the license shall prevail.
Exemplar N4D-5
To the extent that specific terms and conditions concerning Confidential Information, for example use of software, have been stipulated in any Future Agreement, such terms and conditions shall, in case of conflicting terms between this Agreement and the Future Agreement, prevail over the terms and conditions of this Agreement.
Confidentiality Period
In many instances, the code owner will exempt the code from the specified period of confidentiality, leaving the disclosure and use restrictions applicable to code in place for an indefinite/unspecified term:
Exemplar N4D-6
This Agreement establishes the terms and conditions for the parties’ exchange of Confidential Information during the period from the Effective Date until the date of termination of this Agreement. This Agreement may be terminated at any time by either party hereof upon fourteen (14) days’ prior written notice to the other party; provided that the Receiving Party's obligation to protect Confidential Information received prior to the date of such termination shall continue until three (3) years after the date of termination of this Agreement, unless such Information consists of source code, in which case the confidentiality obligations shall continue until such Information is permitted to be disclosed pursuant to this Agreement. Upon termination of this Agreement, the Receiving Party shall return to the Disclosing Party or destroy (which destruction shall be confirmed in writing by the Receiving Party to the Disclosing Party) all materials in its possession that contain Confidential Information received from the Disclosing Party.
Exemplar N4D-7
This Agreement shall govern disclosures between the Parties for two (2) years after the Effective Date. The Receiving Party shall protect Confidential Information, in the manner provided herein, for three (3) years after receipt thereof (except for source code, which shall be kept in confidence pursuant to this Agreement in perpetuity), unless such obligation ceases earlier pursuant to Section 1 above.
Exemplar N4D-8
This Agreement is intended to cover Proprietary Information disclosed by each party both prior and subsequent to the date hereof. This Agreement will automatically terminate two (2) years after the Effective Date or upon the completion or termination of the parties' investigation, whichever is earlier; provided, however, that: (i) each party’s obligations with respect to the other party’s Proprietary Information will survive completion or termination or the dealings between the parties for a period of five (5) years from the date of disclosure; and (ii) any obligations hereunder relating to source code and trade secrets of the other party shall be perpetual.
Exemplar N4D-9
The confidentiality obligations imposed by this Agreement shall continue until the third (3rd) anniversary of the Termination Date; provided, however, that the confidentiality obligations imposed by this Agreement with respect to source code included in the Proprietary Information shall continue in perpetuity.