“ Protecting the Crown Jewels: Trade Secrets and Non-Disclosure Agreements” Part II By John L. Watkins And Thomas L. McLai...
Protecting the Crown Jewels: Trade Secrets and Non-Disclosure Agreements Part II: Non-Disclosure Agreements
Disclaimer <ul><li>This presentation is for informational purposes only. The presentation is based on general principles o...
Why NDAs Are Important <ul><li>NDAs help protect trade secrets </li></ul><ul><ul><li>Show reasonable efforts made to maint...
Why Not Just Pull One Off the Internet or Re-Use a Form? <ul><li>Different applications ( i.e. , employee vs. potential bu...
NDAs: Potential Applications <ul><li>Employees </li></ul><ul><li>Consultants </li></ul><ul><li>Actual and potential custom...
NDAs: Key Provisions <ul><li>Unilateral or mutual </li></ul><ul><li>Definition of “confidential information” </li></ul><ul...
NDAs: Unilateral or Mutual <ul><li>Unilateral NDAs protect only one side’s confidential information </li></ul><ul><ul><li>...
Definition of Confidential Information <ul><li>Definition is usually broadly stated </li></ul><ul><ul><li>Sometimes all in...
Exceptions to Confidential Information <ul><li>NDAs typically provide that certain information is not “confidential” </li>...
Typical Obligations <ul><li>Use information only for specified purpose </li></ul><ul><li>Share only with those with a need...
Duration <ul><li>Duration of the NDA </li></ul><ul><ul><li>Normally a term of years </li></ul></ul><ul><ul><li>Sometimes w...
Obligations After Termination <ul><li>Most NDAs continue the confidentiality obligation for a period after termination </l...
Dispute Resolution <ul><li>NDAs may contain provisions regarding resolving claims and disputes </li></ul><ul><ul><li>May r...
Other Considerations <ul><li>NDAs often include topics that extend beyond the deemed scope of an NDA </li></ul><ul><ul><li...
Other Steps <ul><li>IT Department should be involved in implementation </li></ul><ul><ul><li>Passwords and other protectio...
Other Steps <ul><li>HR Department and possibly employment counsel should be involved with employee NDAs: </li></ul><ul><ul...
Steps for Employees <ul><li>Maintain copies of NDAs and employment agreements </li></ul><ul><ul><li>Review agreements, wit...
Conclusion <ul><li>Thanks for listening </li></ul><ul><li>In the next podcast, we will cover litigation of trade secret ca...
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Protecting The Crown Jewels: Trade Secrets And Non-Disclosure Agreements, Part II

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These are the slides from Part II of our video podcast series on trade secrets and non-disclosure agreements (NDAs). This part covers the key provisions of NDAs in greater detail. The podcast (slides and audio) is available at www.ctflegal.blip.tv, along with our other podcasts.

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Protecting The Crown Jewels: Trade Secrets And Non-Disclosure Agreements, Part II

  1. 1. “ Protecting the Crown Jewels: Trade Secrets and Non-Disclosure Agreements” Part II By John L. Watkins And Thomas L. McLain Contact : [email_address] or [email_address]
  2. 2. Protecting the Crown Jewels: Trade Secrets and Non-Disclosure Agreements Part II: Non-Disclosure Agreements
  3. 3. Disclaimer <ul><li>This presentation is for informational purposes only. The presentation is based on general principles of Georgia law as of the date the of preparation (March 20, 2009). Georgia law is subject to change, and the law may differ in other jurisdictions. Reviewing or downloading this presentation does not create an attorney/client relationship with the authors or their law firm, Chorey, Taylor & Feil, A Professional Corporation. The authors and their firm provide legal services only pursuant to written engagements. Legal advice must be tailored to the particular circumstances and the applicable law. Those seeking legal advice should consult an experienced attorney in their jurisdiction. </li></ul>
  4. 4. Why NDAs Are Important <ul><li>NDAs help protect trade secrets </li></ul><ul><ul><li>Show reasonable efforts made to maintain secrecy </li></ul></ul><ul><li>NDAs can also protect information that may not qualify as a trade secret </li></ul><ul><ul><li>Often a substantial gray area as to what qualifies as a trade secret </li></ul></ul>
  5. 5. Why Not Just Pull One Off the Internet or Re-Use a Form? <ul><li>Different applications ( i.e. , employee vs. potential business partner) require different considerations </li></ul><ul><li>Law differs and may affect enforcement </li></ul><ul><li>What works in one situation may not work in another </li></ul><ul><li>After all, it’s only your business </li></ul>
  6. 6. NDAs: Potential Applications <ul><li>Employees </li></ul><ul><li>Consultants </li></ul><ul><li>Actual and potential customers </li></ul><ul><li>Actual and potential suppliers </li></ul><ul><li>Potential business partners </li></ul><ul><li>Potential party to a transaction (mergers and acquisitions) </li></ul>
  7. 7. NDAs: Key Provisions <ul><li>Unilateral or mutual </li></ul><ul><li>Definition of “confidential information” </li></ul><ul><ul><li>Specific or general </li></ul></ul><ul><li>Exceptions to confidentiality </li></ul><ul><li>Duration </li></ul><ul><ul><li>Of NDA </li></ul></ul><ul><ul><li>Of confidentiality requirement </li></ul></ul><ul><li>Dispute resolution provisions </li></ul>
  8. 8. NDAs: Unilateral or Mutual <ul><li>Unilateral NDAs protect only one side’s confidential information </li></ul><ul><ul><li>May be appropriate for employees or consultants </li></ul></ul><ul><li>May not be appropriate for companies in or considering a business relationship </li></ul><ul><ul><li>Many “forms” are unilateral </li></ul></ul>
  9. 9. Definition of Confidential Information <ul><li>Definition is usually broadly stated </li></ul><ul><ul><li>Sometimes all information is confidential </li></ul></ul><ul><ul><li>Sometimes information developed from confidential information is itself confidential </li></ul></ul><ul><li>Some agreements have a requirement of stamping information as “confidential” </li></ul><ul><ul><li>Or identifying information in writing as confidential </li></ul></ul><ul><li>A party’s interests will often determine its preferences </li></ul><ul><ul><li>Another reason why “one size fits all” does not work </li></ul></ul>
  10. 10. Exceptions to Confidential Information <ul><li>NDAs typically provide that certain information is not “confidential” </li></ul><ul><ul><li>Information in the public domain </li></ul></ul><ul><ul><li>Information known by the receiving party </li></ul></ul><ul><ul><li>Information received from a third party under no condition of confidentiality </li></ul></ul><ul><li>And sometimes others </li></ul>
  11. 11. Typical Obligations <ul><li>Use information only for specified purpose </li></ul><ul><li>Share only with those with a need to know who are also bound to maintain confidentiality </li></ul><ul><li>No disclosure to third persons </li></ul><ul><li>Use reasonable measures to maintain confidentiality </li></ul>
  12. 12. Duration <ul><li>Duration of the NDA </li></ul><ul><ul><li>Normally a term of years </li></ul></ul><ul><ul><li>Sometimes with a right to terminate by notice </li></ul></ul><ul><li>Duration of the confidentiality obligation after termination of the NDA </li></ul>
  13. 13. Obligations After Termination <ul><li>Most NDAs continue the confidentiality obligation for a period after termination </li></ul><ul><ul><li>Usually: confidential information for a period of years </li></ul></ul><ul><ul><li>Trade secrets: So long as they remain a trade secret </li></ul></ul><ul><ul><li>Time period used in NDA often differs based on the business considerations </li></ul></ul><ul><li>Many NDAs provide for the return or destruction of confidential information upon termination or written demand </li></ul>
  14. 14. Dispute Resolution <ul><li>NDAs may contain provisions regarding resolving claims and disputes </li></ul><ul><ul><li>May require that claims be brought in a particular jurisdiction </li></ul></ul><ul><ul><li>May require binding arbitration instead of court proceedings </li></ul></ul><ul><li>These provisions are often not given adequate consideration in negotiations </li></ul>
  15. 15. Other Considerations <ul><li>NDAs often include topics that extend beyond the deemed scope of an NDA </li></ul><ul><ul><li>Intellectual property protection (invention assignment; work for hire) </li></ul></ul><ul><ul><li>Non-competition, non-solicitation </li></ul></ul><ul><ul><li>Non-disparagement </li></ul></ul><ul><ul><li>Protection of work force </li></ul></ul>
  16. 16. Other Steps <ul><li>IT Department should be involved in implementation </li></ul><ul><ul><li>Passwords and other protections </li></ul></ul><ul><ul><li>Monitoring unusual activity </li></ul></ul><ul><ul><ul><li>Excessive or unusual copying or downloading of files </li></ul></ul></ul><ul><ul><ul><li>Accessing information not related to job </li></ul></ul></ul><ul><ul><ul><li>Accessing data at unusual hours </li></ul></ul></ul><ul><li>Virtual Data Rooms </li></ul><ul><ul><li>Used for exchanging and monitoring confidential information in transactions </li></ul></ul>
  17. 17. Other Steps <ul><li>HR Department and possibly employment counsel should be involved with employee NDAs: </li></ul><ul><ul><li>Implementation of NDAs and related employment provisions </li></ul></ul><ul><ul><li>Monitoring enforcement, including during exit interviews </li></ul></ul>
  18. 18. Steps for Employees <ul><li>Maintain copies of NDAs and employment agreements </li></ul><ul><ul><li>Review agreements, with counsel if necessary, prior to leaving </li></ul></ul><ul><ul><li>Get a clear understanding and permission about any information that is to be taken </li></ul></ul><ul><li>Do not assume that because you created it, you can take it! </li></ul>
  19. 19. Conclusion <ul><li>Thanks for listening </li></ul><ul><li>In the next podcast, we will cover litigation of trade secret cases </li></ul>

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