In confidentiality agreements, clauses that time-bound the confidentiality obligation are not uncommon. “The obligations of confidentiality under this agreement expire five years after termination”, eg, is a typical formulation. Oft-cited justifications for this include administrative convenience, finality of obligations, and that most information is expected to “go stale” after a while.
The problem, however, is that a trade secret derives its protection from proof that the owner has exercised reasonable efforts to safeguard its secrecy. Routinely signing time-bound NDAs that allow the trade secrets recipient to freely use and disclose such trade secrets after the passage of time can be fatal to their protectability.
Protecting trade secrets from the operation of the time-bound is critical. Strategies for drafting and negotiating relevant work product in this regard can be found here at Redline.
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