Trade Secret NDA Template

A Trade Secret Non-Disclosure Agreement is a specific kind of non-disclosure agreement (NDA). While the latter protects many kinds of business information, a Trade Secret NDA specifically protects trade secrets and proprietary intellectual property.

Such agreements include clauses found in most confidentiality and intellectual property agreements to distinguish trade secrets from general confidential information and to require that both types of information be handled differently․

Key highlights:

• Legal definitions for trade secrets and proprietary information
• A broad definition of trade secret related confidential information
• Confidentiality obligations of the receiving party
• Obligation to return confidential materials at relationship's conclusion

This template can be downloaded, edited, and used in a Word, PDF or online format to form a legally enforceable Trade Secret NDA․

When to Use this Trade Secret NDA

Compared to a standard NDA template, this Trade Secret NDA template is most appropriate when the disclosed information has economic value because it is not publicly known and gives the company a competitive advantage․

Example use cases include:

• Sharing proprietary technology or algorithms
• disclosing product formulas, manufacturing methods or processes
• Including source code or technical documentation as necessary․
• Engaging contractors who have access to sensitive intellectual property
• Collaborating in product development or research

In practice, most companies use both types of NDAs: the standard NDA covering most of the discussions, while especially sensitive proprietary information is protected by a trade secret NDA․

How This Trade Secret NDA Differs from a Standard NDA

What’s Included in the Trade Secret NDA Sample

This Trade Secret NDA template contains the essential clauses used to protect proprietary information:

• Identification of the disclosing and receiving parties
• Definition of trade secrets
• Definition of confidential information
• Description of business activities covered by the agreement
• Exclusions for publicly available information
• Non-disclosure obligations
• Duration of confidentiality obligations
• Return of trade secret materials after termination
• Enforcement provisions

How to Write Your Trade Secret NDA

Follow these steps to properly customize the Trade Secret Non-Disclosure Agreement template.

1. Effective Date

The effective date is when these confidentiality obligations begin․ If immediate confidentiality is needed from the document's signing date, use that․ If this agreement is made prior to negotiations, you may wish to set the effective date as the anticipated start of the working relationship․

2. Define the Business Activities

This template has an area to describe the business activities that are being covered in the agreement․ Use this section to clearly define the purpose of the trade secret being shared, such as:

• product development collaboration
• consulting services
• software development
• manufacturing support
• research or technical evaluation

3. Review and Expand the Trade Secret Definition

First, under the agreement, trade secrets include formulas, patterns, programs, devices, techniques, and processes․ You may wish to adapt this section by giving examples specific to your business such as:

• proprietary algorithms or source code
• manufacturing formulas or recipes
• internal pricing models
• supply chain methods

Being specific provides greater protection for valuable intellectual property․

4. Customize the Confidential Information Scope

Confidential information may describe documents, reports, models, marketing strategies, and business plans․ You might also be able to add additional categories relevant to your business․

• customer lists or prospect databases
• internal analytics or research results
• product roadmaps or prototypes
• internal training materials

If a broader definition is adopted, all information in the trade secret is protected․

5. Review the Exclusions Clause

The exclusions section states that information cannot be protected if such information is already public․ When making changes to this section, consider:

• how information becomes public
• whether previously known information was excluded
• whether independently developed information is excluded

6. Determine the Confidentiality Term

The template allows the obligations to remain confidential indefinitely, or for as long as the trade secret's confidentiality can be preserved․

7. Confirm the Return of Materials Requirement

The template also obliges the receiving party to return any confidential information within 15 days of termination․ That clause is subject to your customization:

• if files need to be deleted digitally
• whether backup copies should be destroyed
• whether it is necessary to produce written confirmation

This provision also helps ensure that the receiving party does not retain the trade secret․

8. Clarify the Attorney Fees Clause

The section on attorney fees states that the losing party must pay the other party's attorney fees if they violate․ Some businesses modify the clause to include what follows․

reimbursement for investigation costs court filing expenses recovery of damages caused by disclosure

Clear enforcement terms provide added deterrent to potential trade secret theft․

Once done, sign electronically this Trade Secret NDA and share it to another party for signature. Then, it becomes legally binding.