Retention of Confidential Information

NDA

Retention of Confidential Information

As an important exception to the duty to return or destroy confidential information upon the termination or expiration of any NDA, the parties should address the practical and legal need for post-NDA retention of information in certain well-defined circumstances, including those enumerated in the following standard exemplar:

Exemplar N20B-1

Notwithstanding the foregoing, neither Party is obligated to return or destroy Confidential Information that (a) it is required by law or regulation to retain, (b) is commingled with other information or documents of the Receiving Party if it would pose a substantial administrative burden to destroy such Confidential Information, or (c) is contained in an archived computer system or backup made by the Receiving Party in accordance with its standard security or disaster recovery procedures, provided in each case that: (i) such retained documents will eventually be erased or destroyed in the ordinary course of records management and/or data processing procedures; and (ii) that the Receiving Party remains fully subject to the obligations of confidentiality in this Agreement until the later of the eventual destruction or the termination or expiration of the confidentiality obligations set out in this Agreement.

Substantial Burden

As the following exemplars reflect, one broad exception to the duty to return or destroy confidential information addresses the situation where compliance with such a duty would impose a substantial technical or financial burden, e.g., because the information has been co-mingled and entangled with other non-protected information such that any extraction or separation therefrom would be problematic:

Exemplar N20B-2

The Recipient will promptly return or destroy the Discloser’s Confidential Information upon the written request of the Discloser. Neither party is obligated to erase Confidential Information commingled with other information or documents of the Recipient if it would pose a substantial administrative burden to excise such Confidential Information, or contained in an archived computer system backup made in accordance with such party's security or disaster recovery procedures, provided in each case that such commingled documents and archived copies: (i) are handled in the ordinary course of such party’s data processing procedures; and (ii) remain fully subject to the obligations of confidentiality in this Agreement until the eventual erasure or destruction or the expiration of the confidentiality obligations set out in this Agreement.

Exemplar N20B-3

Each party agrees to return or destroy all of the Confidential Information of the other so disclosed, and any copies of same, upon the termination of this Agreement or at such other time as the other may request. Neither party is obligated to return or destroy Confidential Information that (i) it is required by law or regulation to retain, but then only for the time period required, or (ii) is commingled with other information or documents of the Receiving Party if it would pose a substantial administrative burden to destroy such Confidential Information, or if the Confidential Information is contained in an archived computer system or backup made by the Receiving Party in accordance with its standard security or disaster recovery procedures, provided in each case that: (A) such retained documents will eventually be erased or destroyed in the ordinary course of its records management and/or data processing procedures; and (B) that the Receiving Party remains fully subject to the obligations of confidentiality in this Agreement until the earlier of the eventual destruction, or the expiration of the confidentiality obligations set out in this Agreement.

Exemplar N20B-4

Upon expiration or termination of this Agreement, Recipient shall also use reasonable efforts to delete all electronic copies of Confidential Information under its control. If it would be unreasonably costly or burdensome for Recipient to immediately delete copies of Confidential Information from its routinely-made backup or disaster-recovery systems, then Recipient will not be required to do so until the next regularly-scheduled destruction of such copies in the usual course of business and in compliance with a reasonable back-up retention policy adopted by Recipient, provided that such copies remain subject to the requirements of this Agreement so long as they remain in Recipient’s custody or control.

Exemplar N20B-5

Notwithstanding the foregoing, if and to the extent required by applicable law, regulation or bona fide records retention policy, the Receiving Party and its Representatives may retain copies of the Confidential Information for archival purposes, subject to the ongoing obligations of nondisclosure and nonuse herein in accordance with the terms hereof. In addition, neither the Receiving Party nor its Representatives shall be required to return or destroy any documents or information to the extent same have been backed up in accordance with the Receiving Party’s or such of its Representative’s (as the case may be) disaster recovery procedures and cannot be expunged without considerable effort.

Confidential Information Residing in Routine Back-Ups

As the following exemplars reflect, an exception from the obligation to return or destroy confidential information may be required for information that is electronically stored as part of a party’s back-up systems:

Exemplar N20B-6

Nothing in this Section shall require either party or any of their respective Affiliates to return, destroy, or delete copies of any computer records and/or files containing the Confidential Information that have been created pursuant to automated processes such as document retention/archiving and/or back-up policies/procedures, provided that each and any such copies: (x) are kept confidential and cannot be accessed in the regular course of business; (y) are maintained and archived in compliance with reasonable information security standards; and (z) are properly deleted as required by the Receiving Party’s document retention/archiving and/or back-up policies/procedures.

Exemplar N20B-7

In addition, Recipient shall take all reasonable steps to remove any Confidential Information stored within any computer system whether or not in machine-readable form and certify, by an authorized representative in writing to the other, that all such material has been destroyed. The provisions of this Section "Return of Documents" shall not apply to copies of electronically exchanged Confidential Information made as a matter of routine backup and to Confidential Information or copies thereof which must be stored by the Recipient or its advisers according to provisions of mandatory local laws ("Archived Information"), provided that, notwithstanding the term specified in Section 6 below, Recipient protect such Archived Information for as long as such Archived Information is retained.

Exemplar N20B-8

Supplier shall not be deemed to have violated its obligations with respect to destroying Confidential Information to the extent such Confidential Information is located on electronic back-up tapes in accordance with the Supplier’s or its Representatives’ normal procedures for backing-up data and such back-up tapes are not easily accessible to the Supplier’s or its Representatives’ employees or officers other than those employees and officers whose duties relate to information technology support (provided that the Supplier and its Representatives will continue to be bound by its obligations of confidentiality hereunder with respect to such data).

Exemplar N20B-9

Notwithstanding the foregoing, (i) in the event of such a decision or request, the Receiving Party may retain one archival copy of any Confidential Information (which shall remain subject to the confidentiality terms hereof) and (ii) the obligations in this Agreement do not apply to copies of any Confidential Information that are automatically retained as part of a bona fide computer back-up, recovery or similar archival or disaster recovery system. Notwithstanding the return or destruction of the Confidential Information, each party and its Representatives will continue to be bound by its obligations of confidentiality, non-use and other obligations hereunder.

Exemplar N20B-10

Upon the Disclosing Party’s written request, the Receiving Party shall (at the Receiving Party’s election) promptly return or destroy (provided that any such destruction shall be certified by a duly authorized Representative of the Receiving Party) all Confidential Information of the Disclosing Party and all copies, reproductions, summaries, analyses or extracts thereof or based thereon (whether in hard-copy form or on intangible media, such as electronic mail or computer files) in the Receiving Party’s possession or in the possession of any Representative of the Receiving Party; provided, however: (i) that if a legal proceeding has been instituted to seek disclosure of the Confidential Information, such material shall not be destroyed until the proceeding is settled or a final judgment with respect thereto has been rendered; and (ii) that the Receiving Party shall not, in connection with the foregoing obligations, be required to identify or delete Confidential Information held in archive or back-up systems in accordance with general systems archiving or backup policies.

The following exemplars further require the receiving party to ensure that its employees or other personnel under its control cannot access any confidential information retained in backups, for example, via networked or linked computers, in the ordinary course:

Exemplar N20B-11

Notwithstanding the above, the Receiving Party may retain copies of INFORMATION stored on backup disks or in backup storage facilities automatically produced in the ordinary course of business which are not, in the ordinary course of business, accessible from employee workstations. Any INFORMATION so retained will be held subject to the confidentiality and use limitations of this Agreement and will not be accessed by any person except information technology systems administrators or used for any purpose except necessary data storage systems maintenance.

Exemplar N20B-12

Upon termination or expiration, whichever occurs first, Recipient will promptly cease all use of Discloser’s Proprietary Information. The Recipient shall make a commercially reasonable good faith effort to return all the Discloser’s Proprietary Information, or shall verify destruction of all Proprietary Information received under this Agreement, to the Discloser. For the avoidance of doubt, anything that is stored on routine back-up media solely for the purpose of disaster recovery will be subject to destruction in due course, provided that, employees are precluded from accessing such information in the ordinary course of business prior to destruction. The recipient may keep one (1) copy of the Discloser’s Proprietary Information for archival purposes.

Exemplar N20B-13

Notwithstanding the foregoing, latent data such as deleted files, and other non-logical data types, such as memory dumps, swap files, temporary files, printer spool files, and metadata that can only be retrieved by computer forensics experts and is generally considered inaccessible without the use of specialized tools and techniques will not be within the requirement for return or destruction of Proprietary Information as set forth by this provision.

Exemplar N20B-14

Receiving party will return (or destroy at the disclosing party’s option) all written or tangible Information received from the other party or which incorporates or references the other party’s Information (including all copies thereof) upon the other party’s request to do so, provided that the parties shall be permitted to retain a copy of any Information in order to comply with any legal or regulatory obligations to which they may be subject and further provided the receiving party shall be entitled to retain copies of Confidential Information stored on backup disks or in backup storage facilities automatically produced in the ordinary course of business. Any such Confidential Information so retained will be held subject to the confidentiality and use limitations of this Agreement and will not be accessed by any person except information technology systems administrators or used for any purpose except necessary data storage systems maintenance.

However, the following exemplar may be used to prevent backed-up and retained confidential information from finding its way back into a party’s real-time system through the restoration process:

Exemplar N20B-15

If data is restored to Recipient’s production systems from a backup or disaster recovery system after Confidential Information was otherwise required to be returned or destroyed, Recipient must either ensure that the restoration does not include any Confidential Information which should otherwise have been returned or destroyed or, if such Confidential Information is included in the restoration, securely delete such Confidential Information promptly after the restoration.

Retention by Professional Advisors

Parties may also agree to exempt certain employees, representatives or advisors who are licensed members of highly regulated professions, such as lawyers and accountants, from the duty to return or destroy confidential information.

Retention by Legal Counsel

Exemplar N20B-16

All CONFIDENTIAL INFORMATION shall be and remain the property of the DISCLOSING PARTY, and all CONFIDENTIAL INFORMATION received under this Agreement, including any product samples, shall be promptly returned to the DISCLOSING PARTY upon written request (but in no event later than (30) days after receipt of such request), or destroyed at the option of the DISCLOSING PARTY, except that one copy of the disclosed CONFIDENTIAL INFORMATION may be retained exclusively by RECIPIENT’S legal counsel for archival purposes and shall remain subject to the nondisclosure and use restriction terms of this Agreement.

Exemplar N20B-17

All documents and other tangible objects containing or representing Confidential Information that have been disclosed by either party to the other party, and all copies or extracts thereof that are in the possession of the other party, shall be and remain the property of the disclosing party and shall be promptly returned to the disclosing party upon the disclosing party's written request. Notwithstanding the foregoing, a receiving party may retain in the offices of its legal advisor a single archival copy of any written or photographic Confidential Information provided by the other party under this Agreement, which copy shall only be used by the receiving party and its legal advisors in connection with the review of its obligations under this Agreement.

Retention by Accountants

Exemplar N20B-18

All Information shall, at the Receiving Party’s option, either be destroyed or returned to the Providing Party immediately upon the Providing Party's written request. The Receiving Party agrees not to retain any copies, extracts or other reproductions, in whole or in part, and will provide the Providing Party with written confirmation of destruction, if applicable. Notwithstanding anything to the contrary in this Agreement, (a) the Receiving Party shall have no obligation to return or destroy Information (including copies, extracts and other reproductions) retained in standard archival or computer back-up systems or pursuant to the Receiving Party’s or its Representatives' normal document or e-mail retention practices, (b) the Receiving Party’s or its Representatives may retain Information to the extent required (based upon the advice of counsel) by legal requirements or by governmental or regulatory authority, and (c) the Receiving Party’s Representatives which are accountants may retain Information pursuant to their professional obligations. Any Information retained by the Receiving Party or its Representatives as described in subparagraphs (a) through (c) above shall be maintained as confidential and subject to the terms and conditions of this Agreement.

Retention for Compliance Purposes

As illustrated by the following exemplars, a broad exception from the duty to return or destroy confidential information may be necessary for legal or regulatory compliance purposes:

Exemplar N20B-19

Notwithstanding anything herein to the contrary, the Discloser shall be entitled to retain that portion of the Confidential Information for legal, regulatory or internal compliance purposes, which shall remain subject to the confidentiality obligations set forth in this Agreement.

Exemplar N20B-20

Within thirty (30) calendar days of receipt by the Receiving Party of a written termination notice from the Disclosing Party, the Confidential Information together with all copies thereof shall be returned to the Disclosing Party or destroyed at the Disclosing Party's election and the Receiving Party shall provide clear evidence of such destruction. Nevertheless one copy for the purpose of record may be kept in each party’s legal department to the extent that such a copy is necessary to comply with legal or regulatory requirements.

Exemplar N20B-21

The requirement to return or destroy Confidential Information shall also not apply during any period that the Confidential Information is (a) subject to any document retention as required by law or judicial order; (b) disclosed to any regulatory agency having jurisdiction over the Recipient; (c) subject to any pending or immediately threatened legal proceeding or governmental investigation; or (d) stored electronically as a result of reasonable and customary automated backup or archival systems that are not readily accessible. All such retained Confidential Information will remain subject to the terms of this Agreement.

Exemplar N20B-22

If you decide that you do not wish to proceed with the possible transaction with the Company, you will promptly inform the Company of that decision. In that case, or at any time upon the request of the Company for any reason or for no reason, you will promptly destroy all Confidential Information (and all copies thereof) furnished to you or your Representatives by or on behalf of the Company pursuant hereto, including any materials prepared by you or your Representatives containing, based upon or reflecting Confidential Information, and you shall certify in writing that such destruction has occurred, provided that you and your Representatives may retain Confidential Information for your files as required by your respective record retention policies to comply with legal and/or regulatory requirements.

In Case of a Dispute

The following exemplars make an exception to the duty to return or destroy confidential information to allow the parties to preserve a record in case of a dispute between the parties:

Exemplar N20B-23

Within ten (10) days of receipt of Discloser’s written request, Recipient will return all Confidential Information to Discloser along with all copies and portions thereof, or certify in writing that all such Confidential Information has been destroyed. However, Recipient may retain one (1) archival copy of the Confidential Information that it may use only in case of a dispute concerning this Agreement.

Exemplar N20B-24

All the disclosing party’s Confidential Information, and all inventions and developments which arise therefrom, are and will remain the sole property of the disclosing party. Receiving party will return disclosing party’s Confidential Information and any copies of same upon expiration of the Term, or at such other time as the disclosing party may request; provided, however, that the receiving party may retain one copy thereof in the confidential, restricted access files of its Law Department for use only in the event a dispute arises between the parties hereunder and only in connection with that dispute.

Exemplar N20B-25

Notwithstanding the foregoing, the Receiving Party (a) may retain archival copies of Confidential Information in accordance with legal, regulatory and internal document retention policies, provided that such information retained may only be accessed for the legal, regulatory or compliance purpose that gave rise to such retention, (b) will not be obligated to destroy electronically stored Confidential Information to the extent that it is contained in an archived computer system backup in accordance with its security or disaster recovery procedures so long as such data or records, to the extent not permanently deleted or overwritten in the ordinary course of business, are not accessible in the ordinary course of business or used except as required for backup or data recovery purposes, and (c) may retain one (1) copy of any Confidential Information in its legal files or other secure location to the extent required to defend or maintain any litigation relating to this Agreement or the Disclosing Party’s Confidential Information.

Per Separate License

The following exemplar allows the receiving part to retain confidential information as prescribed in a separate license agreement applicable to such information:

Exemplar N20B-26

Confidential Information, and all copies thereof, remain Discloser’s property. Upon expiration or termination of this NDA or Discloser’s written request, each affected Recipient shall promptly return to Discloser all documents, presentations, and other tangible items of Confidential Information or, at the request of Discloser, certify in writing that all such Confidential Information has been destroyed; provided, however, that Recipient may retain and use such Confidential Information if and to the extent permitted by a license or similar right under a separate agreement.

Adverse Effect

The following exemplars exempt a party from complying with the obligation to return or destroy confidential information to the extent that any return or destruction could adversely affect or otherwise impede the receiving party’s ability to perform other legal or contractual obligations:

Exemplar N20B-27

The Receiving Party acknowledges and agrees that any Confidential Information furnished by the Providing Party shall be and shall remain property of the Providing Party. In the event the Receiving Party determines not to proceed with the Transaction, upon expiration or termination of this Agreement, or within ten (10) days of receipt of a written request of the Providing Party, the Receiving Party (i) will return all Confidential Information to the Providing Party along with all copies and portions thereof, or (ii) shall certify in writing that all such Confidential Information has been destroyed; provided, however, that such return or destruction of the Confidential Information shall not adversely impair the Receiving Party's ability to consummate or perform its obligations in connection with the Transaction; and provided, further, that Receiving Party may retain one archival copy of the Confidential Information if required under applicable law or in case of a dispute between the Parties with respect to this Agreement. Any Confidential Information that is not returned or destroyed, including without limitation, any Confidential Information in oral form, shall remain subject to the confidentiality obligations set forth in this Agreement.

Exemplar N20B-28

The Recipient acknowledges and agrees that any Confidential Information furnished by the Discloser shall be and shall remain property of the Discloser. In the event the Recipient determines not to proceed with the Transaction, upon expiration or termination of this Agreement, the Recipient (i) will return all Confidential Information in whatever form, that was furnished to the Recipient and all notes, memoranda, reports, or other items in any tangible medium that incorporate or refer to Confidential Information, to the Discloser along with all copies and portions thereof, or (ii) shall certify in writing that all such Confidential Information has been destroyed; provided, however, that such return or destruction of the Confidential Information shall not adversely impair the Recipient’s ability to consummate or perform its obligations in connection with the Transaction.

Miscellaneous Retention Grounds

The following exemplars prescribe additional bases for retaining confidential information post NDA:

For Evidentiary Purposes

Exemplar N20B-29

Upon written request by the disclosing party, the receiving party shall promptly return all documents and other intangible materials representing the disclosing party’s Confidential Information and all copies thereof. Notwithstanding the foregoing, the receiving party may retain one copy of the disclosing party’s Confidential Information for evidentiary purposes.

For Compliance and Enforcement of Confidentiality Obligations

Exemplar N20B-30

Notwithstanding the foregoing, the Receiving Party shall be entitled to keep a single copy of Confidential Information of the Disclosing Party following termination of this Agreement for the sole, exclusive, and limited purpose of the Receiving Party’s necessary records for only such time period as may be proscribed by law, so long as such copy is maintained in a protected location without general access to such records and is used for no purpose other than as required for audits and enforcement of legal rights.

Exemplar N20B-31

Upon the earlier of (i) termination of this Agreement or (ii) a request from the disclosing party, Confidential Information disclosed under this Agreement shall be promptly destroyed, except that the Receiving Party’s legal counsel may keep one (1) copy of the Confidential Information solely for the purposes of ascertaining its obligations under and compliance with this Agreement.

For Archival Purposes

Exemplar N20B-32

In the event of a request for the return or destruction of Confidential Information, the Receiving Party may retain such Confidential Information as forms part of the permanent records which it is bound by law or regulatory requirement to preserve or which the Receiving Party may reasonably require for archive purposes and the provisions of this Agreement shall, notwithstanding its termination, continue to apply to all such retained Confidential Information.

Retained Information Still Subject to NDA

Where the parties agree to allow for post-NDA retention of confidential information, it is critical to require that any information permissibly retained must remain subject to the NDA’s confidentiality obligations for as long as it is retained:

Exemplar N20B-33

Notwithstanding the delivery to the Disclosing Party (or the destruction) of Confidential Information pursuant to this Agreement, the Receiving Party and its Representatives shall continue to be bound by their confidentiality obligations and other applicable obligations under this Agreement.

Exemplar N20B-34

Notwithstanding anything herein to the contrary, the Recipient and its Representatives shall each be entitled to retain the Confidential Information of the Discloser to the extent required for legal, regulatory or internal compliance purposes, which retained Confidential Information shall remain subject to the confidentiality obligations set forth in this Agreement.

Exemplar N20B-35

Except to the extent a party is advised by counsel that such destruction is prohibited by law, the Receiving Party and its Representatives will also destroy all written material, memoranda, notes, copies, excerpts and other writings or recordings whatsoever prepared by the Receiving Party and/or its Representatives based upon, containing or otherwise reflecting any Evaluation Material; provided, however, that neither the Receiving Party nor any of its Representatives shall be obligated to return or destroy Evaluation Material to the extent it has been electronically archived by any such party in accordance with its automated security and/or disaster recovery procedures as in effect from time to time; provided that any such Evaluation Material so retained shall remain subject to the confidentiality provisions contained herein for so long as it is retained by the Receiving Party, irrespective of the term of this Agreement.

No License or Waiver

The following exemplar makes clear that any agreement to allow a party to retain confidential information does not implicitly grant a license thereto:

Exemplar N20B-36

All Protected Information shall be and remain the property of the Disclosing Party, and such Protected Information, if written, and any copies thereof, as well as any written summaries of any Protected Information disclosed orally, shall be promptly returned to the Disclosing Party upon written request, or destroyed at the Recipient’s option; provided however that Recipient’s legal counsel may retain one copy of the Protected Information for legal retention (archival/evidentiary) purposes; provided, further that Recipient’s obligations with respect to such retained copy of the Protected Information shall remain in effect until the expiration of the term of this Agreement as provided herein. The Recipient shall not use the Protected Information for any purpose other than as contemplated by this Agreement. No license is hereby granted directly or indirectly under any patent or copyright now held by, or which may be obtained by, or which is or may be licensed by the Disclosing Party.

CC

Retention of Confidential Information

NDA

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