Confidential Information Protection-Focused Clause

A Confidential Information Protection-Focused Clause is a contract clause that contains confidentiality-focused provisions (with contract terms for keeping intellectual property confidential).

• AKA: IP Protection Clause.
• Context:
  • It can (typically) contain Confidentiality-Focused Provisions, such as:
    • Definition of Confidential Information Provision (with labels CONFIDENTIAL_INFORMATION_DEFINITION, SCOPE_OF_CONFIDENTIAL_INFORMATION, EXCLUSIONS), which clearly defines what information is considered confidential and protected under the agreement, such as:
    • Obligation to Maintain Confidentiality Provision (with labels CONFIDENTIALITY_OBLIGATION, NON_DISCLOSURE_OBLIGATION, STANDARD_OF_CARE, DURATION_OF_OBLIGATION), which establishes the duty of the receiving party to keep the information confidential and not disclose it to third parties, such as:
    • Permitted Use of Confidential Information Provision (with labels PERMITTED_USE, PURPOSE_LIMITATION, PROHIBITED_USE), which specifies the limited purposes for which the receiving party may use the confidential information, such as:
    • Exceptions to Confidentiality Provision (with labels EXCEPTION_LEGAL_REQUIREMENT, EXCEPTION_PRIOR_KNOWLEDGE, EXCEPTION_INDEPENDENTLY_DEVELOPED), which outlines specific circumstances under which the confidentiality obligations do not apply, such as:
    • Ownership of Confidential Information Provision (with labels OWNERSHIP_OF_CONFIDENTIAL_INFORMATION, NO_LICENSE_GRANTED, NO_WARRANTY), which clarifies that the confidential information remains the property of the disclosing party and that the agreement does not grant any rights or licenses to the receiving party.
    • Non-Disclosure to Employees and Agents Provision (with labels DISCLOSURE_TO_REPRESENTATIVES, REPRESENTATIVES_CONFIDENTIALITY_OBLIGATION, RESPONSIBILITY_FOR_REPRESENTATIVES), which requires the receiving party to ensure that its employees and agents who have access to the confidential information are bound by similar confidentiality obligations.
    • Return or Destruction of Confidential Information Provision (with labels RETURN_OR_DESTRUCTION_OBLIGATION, CERTIFICATION_OF_DESTRUCTION, RETENTION_OF_COPIES), which requires the receiving party to return or destroy all confidential information upon request or termination of the agreement.
    • Remedies for Breach Provision (with labels EQUITABLE_RELIEF, IRREPARABLE_HARM, CUMULATIVE_REMEDIES), which outlines the remedies available to the disclosing party in the event of a breach of confidentiality.
    • Governing Law and Jurisdiction Provision (with labels GOVERNING_LAW, CONSENT_TO_JURISDICTION, WAIVER_OF_JURY_TRIAL), which specifies the governing law and jurisdiction for the interpretation and enforcement of the confidentiality agreement.
    • ...
  • It can include exceptions to allow for legally-required disclosures or other necessary sharing of Confidential Information.
  • It can appear in Confidential Information Protection Agreements (such as Non-Disclosure Agreements, etc.).
  • ...
• Example(s):
  • a Confidential Information Protection Risk Mitigation Clauses, such as:
    • [[]].
  • a Mutual Confidentiality Clause (with mutual confidentiality provisions) that requires both parties to preserve confidentiality, such as:
    • "Each party agrees that it will not disclose to any third party Confidential Information of the other party, except to its employees or consultants as necessary to perform its obligations under this Agreement, and that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control, which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance.".
    • an annotated version, such as:
      "Each party_(DEFINITION)¹ agrees that it will not disclose to any third party Confidential Information of the other party,_{(OBLIGATION, CONFIDENTIALITY_OBLIGATION, DISCLOSURE_PROHIBITION)}² except to its employees or consultants_(EXCEPTION)³ as necessary to perform its obligations under this Agreement,_{(CONDITION, PERFORMANCE_CONDITION)}⁴ and that it will take all reasonable measures to maintain the confidentiality of all Confidential Information of the other party in its possession or control,_{(OBLIGATION, CONFIDENTIALITY_OBLIGATION, REASONABLE_MEASURES_REQUIREMENT)}⁵ which will in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance._{(STANDARD_OF_CARE, OWN_INFORMATION_STANDARD)}⁶".
  • an Employee Confidentiality Clause (with employee confidentiality provisions) binding an employee to confidentiality as part of an employment agreement, such as:
    • "The Employee acknowledges that, in the course of performing their duties under this Agreement, they will have access to information of a confidential or proprietary nature owned by the Employer. The Employee agrees that, during the term of their employment and thereafter, they shall not disclose any such Confidential Information to any person or entity or use it for any purpose other than the advancement of the Employer's business interests, except with the prior written authorization of the Employer."
    • an annotated version, such as:
      "The Employee_(DEFINITION)¹ acknowledges that, in the course of performing their duties under this Agreement, they will have access to information of a confidential or proprietary nature owned by the Employer._{(ACKNOWLEDGMENT, CONFIDENTIAL_INFORMATION_ACCESS)}² The Employee agrees that, during the term of their employment and thereafter,_{(OBLIGATION, CONFIDENTIALITY_OBLIGATION, DURATION)}³ they shall not disclose any such Confidential Information to any person or entity or use it for any purpose_{(PROHIBITION, DISCLOSURE_PROHIBITION, USE_PROHIBITION)}⁴ other than the advancement of the Employer's business interests,_(EXCEPTION)⁵ except with the prior written authorization of the Employer._{(EXCEPTION_CONDITION)}⁶".
  • a Vendor Confidentiality Clause (with vendor confidentiality provisions) that a company includes in contracts with its vendors and suppliers, such as:
    • "The Vendor acknowledges that all information provided by the Company or obtained by the Vendor in performance of this Agreement shall be considered the Company's Confidential Information. Vendor shall hold such information in strict confidence and shall not disclose it to any third party nor use it for any purpose other than performing its obligations under this Agreement. Upon termination of this Agreement, or at any time upon the Company's request, Vendor shall promptly return all materials containing Confidential Information."
    • an annotated version, such as:
      "The Vendor_(DEFINITION)¹ acknowledges that all information provided by the Company or obtained by the Vendor in performance of this Agreement shall be considered the Company's Confidential Information._{(ACKNOWLEDGMENT, CONFIDENTIAL_INFORMATION_DEFINITION)}² Vendor shall hold such information in strict confidence and shall not disclose it to any third party nor use it for any purpose_{(OBLIGATION, CONFIDENTIALITY_OBLIGATION, DISCLOSURE_PROHIBITION, USE_PROHIBITION)}³ other than performing its obligations under this Agreement._(EXCEPTION)⁴ Upon termination of this Agreement, or at any time upon the Company's request,_(CONDITION)⁵ Vendor shall promptly return all materials containing Confidential Information._{(OBLIGATION, RETURN_OR_DESTRUCTION_OBLIGATION)}⁶".
  • a Unilateral Confidentiality Clause, such as:
    • "Each party agrees to retain in confidence the non-public information and know-how disclosed or made available by the other party pursuant to this Agreement that is either designated as proprietary and/or confidential, or by the nature of the circumstances surrounding disclosure, ought reasonably to be treated as proprietary and/or confidential ('Confidential Information'). Each party shall treat the Confidential Information of the other party with at least the same degree of care as it treats its own confidential information of like kind, but in no event shall it use less than a reasonable degree of care."
    • an annotated version, such as:
      "Each party agrees to retain in confidence the non-public information and know-how disclosed or made available by the other party pursuant to this Agreement_{(OBLIGATION, CONFIDENTIALITY_OBLIGATION)}¹ that is either designated as proprietary and/or confidential, or by the nature of the circumstances surrounding disclosure, ought reasonably to be treated as proprietary and/or confidential (Confidential Information)._{(DEFINITION, CONFIDENTIAL_INFORMATION_DEFINITION)}² Each party shall treat the Confidential Information of the other party with at least the same degree of care as it treats its own confidential information of like kind,_{(OBLIGATION, CONFIDENTIALITY_OBLIGATION, STANDARD_OF_CARE, OWN_INFORMATION_STANDARD)}³ but in no event shall it use less than a reasonable degree of care._{(MINIMUM_STANDARD_OF_CARE)}⁴"
  • Survival of Confidentiality Obligations Clause.
  • Copies of Confidential Information Clause.
  • Return and Destruction of Confidential Information Clause.
  • Disclosures to Authorized Persons and Representatives Clause.
  • Disclosures required by Laws and Regulations Clause.
  • ...
• Counter-Example(s):
  • a Non-Compete Clause, which restricts an employee's ability to work for a competitor.
  • an Ownership of Intellectual Property Clause, which specifies who owns IP created during a contractual engagement.
• See: Confidential Information, Trade Secret, Non-Disclosure Agreement, Injunctive Relief

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References

• Perplexity
  • Based on the search results, here are some key clauses that often compose confidentiality agreements or non-disclosure agreements (NDAs):
    1. Definition of Confidential Information Clause: This clause specifies what information is considered confidential and protected under the agreement[7][8].
    2. Parties to the Agreement Clause: Identifies who is disclosing the information (Disclosing Party) and who is receiving it (Receiving Party)[7][8].
    3. Obligations of the Receiving Party Clause: Outlines the duties of the party receiving confidential information, such as keeping it secret and using it only for permitted purposes[6][7].
    4. Exclusions from Confidential Information Clause: Specifies what types of information are not considered confidential, such as publicly known information or information independently developed[6][7].
    5. Term and Duration Clause: Defines how long the confidentiality obligations last[6][7].
    6. Permitted Use and Disclosure Clause: Specifies how the receiving party can use the information and to whom they can disclose it[6][7].
    7. Return or Destruction of Information Clause: Requires the receiving party to return or destroy confidential information at the end of the agreement[6][7].
    8. Remedies for Breach Clause: Outlines the consequences of violating the agreement, which may include injunctive relief or monetary damages[6].
    9. Intellectual Property Rights Clause: Clarifies that the agreement does not transfer ownership of the confidential information[8].
    10. Legal Obligations to Disclose Clause: Addresses situations where the receiving party may be legally compelled to disclose confidential information[7].
  • These clauses help ensure that both parties understand their rights and obligations regarding the confidential information, and provide a framework for protecting sensitive business information.
  • Citations:

[1] https://afterpattern.com/clauses/confidentiality-clause
[2] https://www.utsystem.edu/offices/general-counsel/intellectual-property/intellectual-property-checklists/confidentiality-clause-checklist-sponsored-research-agreements-and-clinical-trial-agreements/confidentiality-sample-clauses
[3] https://www.legislate.ai/blog/key-clauses-in-an-nda
[4] https://legal.thomsonreuters.com/en/insights/articles/confidentiality-agreements
[5] https://contracts.justia.com/contract-clauses/confidentiality/
[6] https://ironcladapp.com/journal/contracts/non-disclosure-agreements/
[7] https://www.everynda.com/blog/10-clauses-have-non-disclosure/
[8] https://contractnerds.com/stick-to-the-core-8-essential-provisions-of-non-disclosure-agreements/  

2024

• LLM

Label	Example 1: Mutual Confidentiality Clause	Example 2: Employee Confidentiality Clause	Example 3: Vendor Confidentiality Clause	Example 4: Unilateral Confidentiality Clause
DEFINITION	"Each party..."	"The Employee..."	"The Vendor..."	"Each party..."
OBLIGATION	"...agrees that it will not disclose..."	"...agrees that... they shall not disclose..."	"...shall not disclose it..."	"...agrees to retain in confidence..."
CONFIDENTIAL INFORMATION	"...to any third party Confidential Information of the other party..."	"...information of a confidential or proprietary nature..."	"...all information provided by the Company..."	"...non-public information and know-how..."
EXCEPTIONS	"...except to its employees or consultants..."	"...except with the prior written authorization of the Employer..."	"...other than performing its obligations under this Agreement..."	*No clearly stated exception*
OBLIGATIONS (Additional)	*No additional obligations*	"...shall hold such information in strict confidence..."	"...shall treat the Confidential Information...with at least the same degree of care..."
STANDARD OF CARE	"...in no event be less than the measures it uses to maintain the confidentiality of its own information of similar importance..."	*No specified standard*	*No specified standard*	"...but in no event shall it use less than a reasonable degree of care"

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