Trade Secret Survival
Contract Type:
NDA
Jurisdiction:
The obligations of confidentiality and non-use set out in Clauses [X] and [Y] shall survive the termination of this Agreement for any reason and shall continue indefinitely. Notwithstanding the foregoing, the receiving party's obligations under this Agreement with respect to any trade secret shall continue for so long as such information remains a trade secret under applicable law."
Explanation
This clause states that confidentiality obligations related to trade secrets will continue indefinitely under the NDA, even after the agreement ends:
- The duties to keep trade secrets confidential and not misuse them do not expire, even if the agreement terminates.
- These trade secret obligations have no time limit and continue forever.
- However, if the information legally loses its status as a trade secret under the law, then confidentiality duties related to it will end.
In plain terms, this imposes lifelong confidentiality for true trade secrets. But these perpetual obligations only apply to data retained as bona fide trade secrets.
If that status changes legally, ongoing secrecy is no longer required.
Trade secrets have historically enjoyed robust and unique protections under the law due to their economic value and vulnerabilities.
Unlike other confidential information governed by contracts, trade secrets are shielded from improper use or disclosure indefinitely if their secrecy is maintained.
As confidentiality agreements proliferated to protect sensitive data, drafters recognized the need to align contractual duties for trade secrets with their special legal status. Allowing those obligations to expire—even years later—could indirectly facilitate loss of trade secret protections if appropriated in the interim.
Thus, standard practice emerged to impose perpetual confidentiality for trade secrets, mirroring their unexpiring legal status. This ensured that an agreement's termination would not enable misuse or public disclosure after the fact. However, if secrecy was compromised elsewhere, diminishing its legal status, so too would related contractual duties.
In summary, indefinite trade secret obligations aimed to buttress their inherent ongoing protections under the law. This prevented termination provisions from indirectly weakening trade secret rights.
The paired lifespan maintains consistent security and properly respects their unique longevity.
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