This contract tip is about the relationship between trade secret laws and confidential information contract provisions.
Most lawyers and businesspeople know that trade secret law protects some business information. They also know that non-disclosure agreements (NDAs) and confidentiality provisions safeguard information.
Where people get confused is the relationship between the two.
I find the best way to understand the relationship of trade secrets and confidentiality provisions is as a Venn diagram.
Trade secret law protects information that is not generally known, has economic value because it is secret, and the business takes reasonable steps to keep it secret. This protection applies even if there is a contract.
Confidentiality provisions in an NDA or other type of contract only protect information to the extent specified in the provision. Whether the information is or is not a trade secret doesn’t matter for purposes of the contractual provision.
These two categories sometimes include the same information, but sometimes they don’t.
Do you find your clients get these concepts confused?
