What information does a nondisclosure agreement not protect?

Submitted by paul on Thu, 10/06/2011 - 9:29am
Non Confidential Information

 

We are often asked what information is not covered by an NDA or Confidentiality Agreement.
 
By way of background, a nondisclosure agreement is a legal document used to protect confidential information during a business proceeding or personal matter.  Often, an individual uses a nondisclosure agreement to protect information related to an invention, idea, pricing, strategy, or other information that they wish to show a third party.  By signing the agreement, the receiving party agrees not to share the disclosed information provided it meets the criteria for confidential or proprietary information.  The information disclosed under a nondisclosure agreement is expected to be kept secret unless it falls within one of six categories of information that are not covered by these nondisclosure agreements.
 
We discussthose six categories in more detail below.
 
1. Publicly known information.
If information is already public or becomes public through no fault of the receiving party, then it is not protected by a nondisclosure agreement.
 
2. Already known information.
Any information that is already known by or in possession of the receiving party is not protected or covered by the NDA.  In other words, if you share information that someone already knows, they do not need to keep it secret.
 
3. Information received from others.
Any information that the receiving party lawfully receives from a third party cannot be held as protected information under a nondisclosure agreement.  For example, if you are trying to sell a new technology to a company and that company decides to purchase that technology from a competitor, any product-related information the receiving party receives from the competitor is no longer covered.  This information is no longer protected since the receiving party received it lawfully from a third party not under the jurisdiction of the nondisclosure agreement.
 
4. Information shared with others.
Any information that the disclosing party includes in the nondisclosure agreement but then shares with a third party on a non-confidential basis is no longer protected under the nondisclosure agreement.  As the same information was shared with a third party on a non-confidential basis, the receiving party no longer has an obligation to keep that information secret.
 
5. Independently developed information.
This issue often arises in large companies.  If one division of a company is given confidential information in a nondisclosure agreement and another division of the company, without ever having received the confidential information, develops the same technology or information independently, then the receiving party is relieved of the responsibility of having to keep the information confidential under the agreement.
 
6. Information not included in the nondisclosure agreement.
If the information (or type of information) is not included specifically in writing in the nondisclosure agreement, it is not considered protected information and can be shared at will.  As an example, if the NDA identifies technical information and designs are protected but does not specifically identify pricing and pricing information is then disclosed it may not be considered protected under the NDA.
 
In addition to the above, a receiving party may also no longer be responsible for maintaining confidentiality if the disclosing party does not use reasonable efforts to maintain secrecy.
 
Consistency in the way you approach disclosed information is important.  Mark your documents as confidential and identify in writing that all the information being disclosed is considered confidential and priprietary.   

 

 

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