NDA carve-outs – what’s not covered?


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NDA carve-outs – what’s not covered?

In a previous post, we discussed general terms found in a non-disclosure agreement, or “NDA.”  One section found in the typical non-disclosure agreement is the exclusions section.  This post will discuss that part in more detail.

NDA exclusions sections generally include five or six different “carve-outs” to secrets or confidential information that are covered by the non-disclosure agreement.  Just about any kind of information can be excluded, but the following five types of information are commonly seen carve-outs.

  • Publicly known information. The first carve-out is information that is already public or becomes public through no fault of the receiving party. Information.  Such information, which might be characterized as confidential information in disclosure meeting and marked confidential, is not covered under the agreement if that information is already known by the public.
  • Already known information. A second carve-out typically found in NDAs is information that, as of the time of receipt by the receiving party, is already known to or in the possession of the receiving party. That is to say, if under a non-disclosure agreement you give me information that I already know, you cannot force me to keep it secret with an NDA.
  • Information received from others. A third typical carve-out is information that at any time is received in good faith by the receiving party from a third party who was lawfully in possession of the information and who had the right to disclose it. If you and I enter into a non-disclosure agreement and you give me confidential information pursuant to that agreement, but I then purchase technology from a third party and, as part of that purchase, receive the same information that you and I agreed would be held private, then I no longer have the obligation to keep that information confidential.  This is because I received the information from a third party who had no obligation to you to keep it confidential. The summary of this particular carve-out is that if I get information from somebody else who knows about it and who received that information lawfully, my obligation to you to keep it secret no longer exists.
  • Information shared with others. A fourth carve-out often seen in NDAs is information that is disclosed to third parties by the disclosing party on a non-confidential basis.  That is, if you give me information under the non-disclosure agreement but then pass the same information on to third parties on a non-confidential basis, then I no longer have an obligation to keep that information secret.
  • Independently developed information. The last carve-out we’ll discuss concerns information that is independently developed by or on behalf of the receiving party without benefit of the transferred confidential information. This occasionally happens in large companies.  For example, you give information to me under an NDA and another division of my company, without ever having received the confidential information, develops the same confidential information or the same technology independently. This independent development relieves me of the responsibility to keep that information confidential under the agreement.

Hopefully, this post and our last on NDAs answered a lot of questions you might have had about NDAs.  If you still have questions about NDAs, consult an attorney experienced in intellectual property law.

Disclaimer: The information and materials provided for this AppMuse.com post have been prepared by Carr & Ferrell LLP for informational purposes only. You should not rely on this post to make decisions critical to your business, as it may be incomplete or inapplicable for your particular circumstances. This general information does not constitute legal advice, and is not intended to replace the counsel of a qualified attorney.

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