Non-Disclosure Exceptions: Exceptions to Exceptions

NDA

Non-Disclosure Exceptions: Exceptions to Exceptions

Whenever an NDA proposes to exempt certain categories of confidential information from the non-disclosure/non-use obligations prescribed in an NDA, consideration should be made to include appropriate and reasonable exceptions to avoid unintended consequences. The broader an exemption is, the more likely it will fail to protect information that should otherwise be or remain protected.

Standard Exceptions

The following exemplar lists a few standard exemptions, along with proposed exceptions:

Exemplar N18E-1

The foregoing obligations shall not apply to any Confidential Information which

(a) is in the public domain at the time of disclosure or later becomes part of the public domain through no fault of the Receiving Party; or

(b) was known to the Receiving Party prior to disclosure by the Disclosing Party without any obligation of confidentiality as proven by the written records of the Receiving Party; or

(c) is disclosed to the Receiving Party by a third party who did not obtain such Confidential Information, directly or indirectly, from the Disclosing Party or who had no obligation of confidentiality; or

(d) was independently developed (by personnel having no access to or did not use the Confidential Information) by the Receiving Party as proven by the written records of the Receiving Party; or

(e) is required by law or administrative order to be disclosed (but only to the extent that such disclosure is required, provided, however, that the Receiving Party shall first have given prior written notice to the Disclosing Party promptly upon becoming aware of any legal requirement to disclose any Confidential Information to enable the Disclosing Party to seek a protective order or other relief from disclosure of the Confidential Information); or

(f) is approved for public release by the disclosing party in writing signed by an authorized representative of the Disclosing Party.

Specific Exceptions:

General Anti-Waiver Clause:

The following exemplars include one or more catch-all provisions designed to avoid waiver of confidentiality due to general, technical, or de minimis disclosure:

Exemplar N18E-2

The above exceptions shall not permit the receiving Party to disregard the obligations of confidence set forth in this Agreement merely because individual portions of the CONFIDENTIAL INFORMATION may be found to be within the exceptions or because the CONFIDENTIAL INFORMATION is implicitly but not explicitly disclosed in information falling within the exceptions.

Exemplar N18E-3

For the purpose of the foregoing exceptions, disclosures which are specific, e.g. as to engineering and design practices and techniques, products, software, services, operating parameters, etc. shall not be deemed to be within the foregoing exceptions merely because they are embraced by general disclosures which are in the public domain or in the possession of the receiving Party.

Exemplar N18E-4

Disclosures of INFORMATION which are specific shall not be deemed to be within the exclusions stated hereinabove because they are embraced by general and/or non-specific disclosures in the public domain or information in the RECEIVING PARTY’s possession.

Combinations

The following exemplars ensure that confidential information that is comprised of a combination of elements will not lose protection if such individual elements are disclosed without disclosing the combination:

Exemplar N18E-5

Any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features thereof are in the public domain or in the possession of the receiving Party, but only if the combination itself and its principle of operation are in the public domain or in the possession of the receiving Party.

Exemplar N18E-6

Any combination of features shall not be deemed to be within the foregoing exceptions merely because individual features thereof are in the public domain or in the possession of the Receiving Party, but only if the combination itself and its principle of operation are in the public domain or in the possession of the Receiving Party.

Exemplar N18E-7

Any combination of Confidential Information disclosed with information not so classified shall not be deemed to be within one of the foregoing exclusions merely because individual portions of such combination are free of any confidentiality obligation or are separately known in the public domain.

Exemplar N18E-8

Any combination of material making up INFORMATION shall not be deemed to be within the exclusions stated hereinabove merely because the individual features are in the public domain or were in the RECEIVING PARTY’s possession unless the combination itself or its principle of operations, or both, are in the public domain or were in the RECEIVING PARTY’s possession.

Rumors

The following exemplar ensures that loss of protection does not occur based on mere rumors or unverified reports of waiver:

Exemplar N18E-9

Confidential Information does not include any information that is or becomes publicly available without breach of this Agreement (provided, however, information that is rumored and/or reported does not become public based only on such rumors and/or reports).

Prior Access

In the section entitled “Prior Access” [N18B], we addressed the exception to confidentiality obligations based on the fact that a receiving party has already or previously had access to, or possession of, confidential information. The following exemplars illustrate a few additional adjustments that can be made to such an exception to limit its scope:

Exemplar N18E-10

Confidential Information which has been already in the possession of the receiving Party - except as a result of any improper action or omission of the receiving Party - at the time of disclosure.

Exemplar N18E-11

Nothing contained herein shall restrict or impair the Receiver’s right to use, disclose or otherwise deal with Confidential Information which the Receiver can show was in its possession, or the possession of its parent, subsidiary or affiliate, at the time of disclosure and which was not acquired, directly or indirectly, under any obligation of confidentiality to the Provider.

Independent Development

The exemption for independent development is more fully discussed in the section entitled “Independent Development” ([N14G]). The following exemplars employ qualifying terms to limit such an exemption:

Exemplar N18E-12

Confidential Information does not include information that is: (a) part of, or becomes part of, the public domain (other than by disclosure by the receiving party in violation of this Agreement); (b) previously known to the receiving party without an obligation of confidentiality; (c) independently developed by the receiving party outside this Agreement or without access to or use of the disclosing party’s confidential information; or (d) rightfully obtained by the receiving party from third parties without an obligation of confidentiality.

Exemplar N18E-13

Nothing contained herein shall restrict or impair the Receiver’s right to use, disclose or otherwise deal with Confidential Information that is independently acquired or developed by the Receiver or any parent, subsidiary or affiliate without violation of the Receiver’s obligations hereunder.

CC

Non-Disclosure Exceptions: Exceptions to Exceptions

NDA

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