Trade secrets clause: Copy, customize, and use instantly
Introduction
A trade secrets clause protects a party’s confidential and proprietary information from being disclosed or used without permission. This clause ensures that sensitive business information, such as formulas, designs, and strategies, remains confidential and safeguarded against unauthorized disclosure. It is essential in agreements involving intellectual property, employment, or partnership.
Below are templates for trade secrets clauses tailored to different scenarios. Copy, customize, and insert them into your agreement.
Standard trade secrets clause
This version offers general protection for trade secrets.
The Parties agree that all trade secrets and proprietary information, including but not limited to formulas, designs, business plans, marketing strategies, and customer lists, shall remain the exclusive property of [Party A]. Both Parties shall take all reasonable measures to protect the confidentiality of these trade secrets and shall not disclose or use them for any purpose outside the scope of this Agreement.
Trade secrets clause with employee obligations
This version includes specific employee-related provisions.
Employees of [Party A] shall not disclose or use any trade secrets obtained during their employment, either during or after their employment ends. Any violation of this clause will result in legal actions, including potential termination and claims for damages.
Trade secrets clause with exception for legal disclosure
This version allows for disclosures required by law.
The Parties agree not to disclose any trade secrets without prior written consent, except when disclosure is required by law, regulation, or court order. In such cases, the Party required to disclose shall provide notice to the other Party to allow for protective measures.
Trade secrets clause with non-compete provision
This clause includes a non-compete provision alongside trade secret protection.
The Parties agree that during the term of this Agreement and for [X] years following its termination, neither Party will use or disclose any trade secrets to directly or indirectly compete with the other Party’s business, and both Parties shall refrain from soliciting or hiring the other Party's employees who had access to such trade secrets.
Trade secrets clause with duration of confidentiality
This version specifies the duration of confidentiality.
The Parties agree to maintain the confidentiality of all trade secrets disclosed under this Agreement for a period of [X] years after the termination or expiration of this Agreement, unless otherwise agreed in writing by both Parties.
Trade secrets clause with restriction on use of information
This version limits how trade secrets can be used.
The Parties agree that any trade secrets shared under this Agreement shall be used exclusively for the purpose outlined in Section [X] and shall not be used for any other purpose without prior written consent from the disclosing Party.
Trade secrets clause with safeguard measures
This version includes specific measures for safeguarding trade secrets.
The Parties agree to implement reasonable safeguards, including physical, electronic, and procedural measures, to protect the confidentiality of trade secrets from unauthorized access, use, or disclosure.
Trade secrets clause with return or destruction of information
This clause requires the return or destruction of trade secrets upon termination.
Upon termination of this Agreement, each Party agrees to return or destroy all materials, documents, and records containing trade secrets belonging to the other Party and certify such destruction upon request.
Trade secrets clause with third-party access restriction
This version restricts third-party access to trade secrets.
The Parties agree not to disclose any trade secrets to third parties without prior written consent from the disclosing Party. Any third-party access to trade secrets must be bound by confidentiality agreements no less restrictive than those in this Agreement.
Trade secrets clause with employee acknowledgment
This version requires employee acknowledgment of confidentiality.
Employees of [Party A] shall acknowledge their understanding of the importance of protecting trade secrets and agree in writing not to disclose or use such trade secrets for any purpose other than fulfilling their duties under this Agreement.
Trade secrets clause with exclusion for publicly available information
This clause excludes publicly available information from trade secret protection.
The obligations set forth in this Agreement shall not apply to trade secrets or proprietary information that becomes publicly available through no fault of the receiving Party or is lawfully received from a third party without any breach of confidentiality.
Trade secrets clause with exception for pre-existing knowledge
This version includes an exception for pre-existing knowledge.
The Parties agree that any information that was previously known or disclosed to the receiving Party before entering this Agreement shall not be considered trade secrets and is not subject to the confidentiality provisions of this Agreement.
Trade secrets clause with sharing of information for joint ventures
This clause addresses trade secrets in joint ventures.
The Parties agree to share trade secrets as necessary for the purpose of evaluating, negotiating, and executing a joint venture. Each Party shall ensure that any shared trade secrets are protected in accordance with the terms of this Agreement.
Trade secrets clause with obligation to notify in case of unauthorized disclosure
This version includes an obligation to notify if trade secrets are disclosed.
In the event of any unauthorized disclosure of trade secrets, the receiving Party shall immediately notify the disclosing Party in writing and take all reasonable actions to mitigate the damage caused by such disclosure.
Trade secrets clause with right to seek injunctive relief
This clause allows for seeking injunctive relief in case of a breach.
The Parties agree that any breach of this trade secrets clause may result in irreparable harm, and as such, the disclosing Party shall have the right to seek injunctive relief in addition to any other legal remedies available.
Trade secrets clause with confidentiality after termination
This version extends confidentiality after termination.
The Parties agree that the confidentiality obligations under this Agreement shall remain in effect even after the termination or expiration of the Agreement, with respect to trade secrets disclosed during the term of the Agreement.
Trade secrets clause with limitations on reverse engineering
This clause includes limitations on reverse engineering.
The Parties agree not to reverse engineer, decompile, or otherwise attempt to recreate any trade secrets or proprietary information disclosed by the other Party under this Agreement, unless expressly permitted in writing.
Trade secrets clause with obligation to notify of potential breaches
This version requires notifying if a potential breach is suspected.
The Parties agree to notify the other Party if they suspect any unauthorized disclosure, use, or breach of trade secrets and to cooperate in investigating and addressing the issue promptly.
Trade secrets clause with obligations on former employees
This clause extends obligations to former employees.
The Parties agree that any former employees who have had access to trade secrets shall continue to be bound by the confidentiality obligations outlined in this Agreement and shall not disclose or use trade secrets after the termination of their employment.
Trade secrets clause with protection for software and algorithms
This version specifically addresses software and algorithms.
The Parties agree that any proprietary software, algorithms, or technological processes disclosed under this Agreement shall be treated as trade secrets and protected in accordance with the confidentiality terms set forth in this Agreement.
Trade secrets clause with dispute resolution for trade secret violations
This clause addresses dispute resolution specifically for trade secret violations.
In the event of a dispute regarding the unauthorized use or disclosure of trade secrets, the Parties agree to resolve the matter through arbitration, in accordance with the arbitration rules set forth in Section [X].
Trade secrets clause with no waiver of confidentiality obligations
This clause specifies that confidentiality obligations are not waived.
The Parties agree that any waiver of rights under this Agreement shall not be construed as a waiver of the confidentiality obligations regarding trade secrets, which shall remain in full force and effect.
Trade secrets clause with obligation to secure data
This version includes an obligation to secure data.
The Parties agree to take all necessary steps to secure trade secrets in their possession, including implementing encryption, password protection, and other data security measures to prevent unauthorized access.
Trade secrets clause with right to seek damages for unauthorized use
This version grants the right to seek damages.
The Parties agree that any unauthorized use or disclosure of trade secrets shall result in liability for actual and consequential damages, and the disclosing Party shall have the right to seek damages for such violations.
Trade secrets clause with protection of marketing techniques
This version addresses the protection of marketing techniques.
The Parties agree that the Company’s marketing strategies, including customer acquisition techniques, advertising methods, and promotional plans, are considered trade secrets. These shall not be disclosed or used by the receiving Party without written consent from the Company.
Trade secrets clause with protection of financial information
This clause ensures the protection of financial information.
The Parties agree that any financial information, including projections, budgets, and earnings reports, that is shared in connection with this Agreement constitutes trade secrets. The receiving Party shall take all necessary measures to safeguard such information.
Trade secrets clause with protection of customer relationships
This version includes protection for customer relationships.
The Parties agree that the relationships with clients, including contact lists, preferences, and past purchases, are trade secrets. The receiving Party shall not disclose or use these customer relationships for any purpose outside of this Agreement.
Trade secrets clause with protection of software code
This version specifically addresses software code.
Any source code, object code, or related software documentation provided by [Party A] is considered a trade secret and shall be treated as confidential, not to be copied, shared, or reverse-engineered without the express written permission of [Party A].
Trade secrets clause with exceptions for public domain information
This clause allows for exceptions for public domain information.
The Parties agree that trade secrets exclude any information that has entered the public domain through no fault of the receiving Party. Any information made publicly available through lawful means is not subject to the confidentiality obligations of this Agreement.
Trade secrets clause with prohibition on unauthorized disclosure to employees
This version limits employee access to trade secrets.
The Parties agree that trade secrets shall only be disclosed to employees on a need-to-know basis, and the receiving Party shall ensure that all employees with access to trade secrets sign confidentiality agreements before receiving any such information.
Trade secrets clause with limitation on disclosure to affiliates
This clause limits trade secret disclosures to affiliates.
Any disclosure of trade secrets to affiliated companies, subsidiaries, or agents must be made under the same confidentiality obligations set forth in this Agreement. The receiving Party shall ensure that any affiliate receiving trade secrets agrees to these terms.
Trade secrets clause with right to audit compliance
This version includes a right to audit for compliance.
The disclosing Party shall have the right to audit the receiving Party’s operations to ensure that trade secrets are being protected in accordance with the terms of this Agreement. The receiving Party agrees to cooperate fully with such audits.
Trade secrets clause with protection of proprietary algorithms
This clause ensures the protection of proprietary algorithms.
The Parties agree that any proprietary algorithms or mathematical models developed by the Company shall be considered trade secrets and shall be kept confidential by the receiving Party, who shall not reverse-engineer, copy, or use these algorithms for any purpose other than the terms of this Agreement.
Trade secrets clause with no license to use trade secrets
This version ensures no implied license to use trade secrets.
Nothing in this Agreement shall grant the receiving Party any rights or license to use the disclosing Party’s trade secrets beyond the limited scope of this Agreement. The receiving Party acknowledges that the trade secrets remain the exclusive property of the disclosing Party.
Trade secrets clause with agreement on non-competition
This clause includes a non-competition aspect regarding trade secrets.
The Parties agree that the use of trade secrets disclosed under this Agreement shall not be used to compete with the disclosing Party’s business during the term of this Agreement and for a period of [X] years after its termination.
Trade secrets clause with obligation to notify of third-party requests
This version includes an obligation to notify of third-party requests.
In the event that the receiving Party receives a third-party request for trade secrets, the receiving Party agrees to immediately notify the disclosing Party and take all necessary steps to protect the confidentiality of the trade secrets.
Trade secrets clause with limited disclosure to contractors
This clause limits disclosure to contractors.
The Parties agree that trade secrets may only be disclosed to contractors, vendors, or service providers if such third parties are bound by a confidentiality agreement that provides protection comparable to the terms outlined in this Agreement.
Trade secrets clause with indemnification for unauthorized use
This version includes indemnification provisions.
The receiving Party agrees to indemnify and hold harmless the disclosing Party from any loss, damage, or liability resulting from the unauthorized use or disclosure of trade secrets, including but not limited to legal fees and damages.
Trade secrets clause with provision for injunctive relief
This version includes injunctive relief for breach of trade secrets.
The Parties agree that any breach of the confidentiality obligations related to trade secrets will result in irreparable harm, and the disclosing Party shall have the right to seek immediate injunctive relief in addition to any other remedies available under law.
Trade secrets clause with provision for return of trade secrets
This clause includes provisions for returning trade secrets.
Upon termination of this Agreement or upon written request from the disclosing Party, the receiving Party agrees to promptly return all trade secrets, including copies of documents, files, and other materials, or destroy them if directed by the disclosing Party.
Trade secrets clause with provision for continued confidentiality after termination
This version ensures confidentiality continues after termination.
The receiving Party agrees that its obligations to maintain the confidentiality of trade secrets shall continue in full force and effect after the termination of this Agreement for a period of [X] years, or until the trade secrets become public knowledge through no fault of the receiving Party.
Trade secrets clause with prohibition on independent discovery
This clause prohibits independent discovery of trade secrets.
The receiving Party agrees not to independently discover or develop any trade secrets that are substantially similar to the trade secrets provided under this Agreement without prior written consent from the disclosing Party.
Trade secrets clause with penalties for unauthorized use
This version includes penalties for unauthorized use.
The Parties agree that any unauthorized use of trade secrets shall result in penalties, including liquidated damages of [X amount] per occurrence, and the disclosing Party may seek additional compensation for any actual harm caused by the breach.
Trade secrets clause with agreement to cooperate in enforcement
This version includes cooperation for enforcement.
The Parties agree to cooperate fully in the event of any enforcement action regarding the protection of trade secrets, including providing all necessary information and assistance to ensure the confidentiality of the trade secrets is maintained.
Trade secrets clause with restriction on reverse engineering
This clause restricts reverse engineering.
The Parties agree that the receiving Party shall not reverse engineer, decompile, or otherwise attempt to reconstruct the trade secrets provided under this Agreement, whether in whole or in part.
Trade secrets clause with restriction on sharing with affiliates
This version restricts trade secrets sharing with affiliates.
The Parties agree not to share any trade secrets with their affiliates, subsidiaries, or partners unless those affiliates are bound by confidentiality obligations that are at least as protective as those outlined in this Agreement.
Trade secrets clause with disclosure in case of merger or acquisition
This clause allows for disclosure during a merger or acquisition.
In the event of a merger, acquisition, or other business combination, the Parties may disclose trade secrets to potential acquirers, provided that the acquirer agrees to keep the trade secrets confidential and is bound by the terms of this Agreement.
Trade secrets clause with obligation to maintain trade secret protection
This version adds a duty to maintain protection.
The receiving Party agrees to take all reasonable steps, including the implementation of security protocols and access controls, to maintain the confidentiality of the trade secrets and to prevent unauthorized use or disclosure.
Trade secrets clause with protection for confidential information during negotiations
This clause includes protection during negotiations.
Any trade secrets or confidential information exchanged during negotiations leading up to the execution of this Agreement shall be protected by the confidentiality provisions outlined herein, regardless of whether the Agreement is ultimately executed.
Trade secrets clause with restriction on disclosure to consultants
This version limits disclosure to consultants.
The Parties agree that no trade secrets shall be disclosed to external consultants or advisors without the express written consent of the disclosing Party, and any such third parties must agree to confidentiality terms that are equivalent to those in this Agreement.
Trade secrets clause with provision for the destruction of copies
This clause includes a requirement for destroying copies.
Upon termination or expiration of this Agreement, the receiving Party shall destroy all copies of the trade secrets, whether in electronic or physical form, and certify such destruction to the disclosing Party within [X] days.
Trade secrets clause with limited access based on need-to-know basis
This version includes need-to-know access provisions.
The Parties agree that trade secrets shall only be disclosed to employees or contractors on a strict need-to-know basis, and those individuals shall be bound by confidentiality agreements that mirror the terms of this Agreement.
Trade secrets clause with no waiver of confidentiality obligations
This clause ensures no waiver of confidentiality.
No act or omission by either Party shall be deemed a waiver of the confidentiality obligations related to trade secrets unless explicitly stated in writing by both Parties. The confidentiality obligations shall remain in effect at all times.
Trade secrets clause with ownership rights of disclosed trade secrets
This version emphasizes ownership rights.
The Parties agree that all trade secrets disclosed under this Agreement remain the sole and exclusive property of the disclosing Party, and the receiving Party does not gain any ownership or rights to use the trade secrets beyond the terms specified in this Agreement.
Trade secrets clause with provision for third-party enforcement
This clause allows for third-party enforcement of trade secrets protection.
The Parties agree that third parties, such as business partners or investors, may have the right to enforce the confidentiality obligations set forth in this Agreement in the event of unauthorized disclosure or use of trade secrets.
Trade secrets clause with indemnification for unauthorized disclosure
This version includes indemnification for unauthorized disclosure.
The receiving Party agrees to indemnify the disclosing Party for any damages, losses, or liabilities incurred as a result of the unauthorized disclosure or misuse of trade secrets by the receiving Party or any third parties to whom trade secrets have been disclosed.
Trade secrets clause with notice requirement for trade secret misappropriation
This clause requires notice in case of misappropriation.
In the event the receiving Party becomes aware of any actual or suspected misappropriation, theft, or unauthorized use of trade secrets, they must immediately notify the disclosing Party and take all reasonable steps to mitigate any harm.
Trade secrets clause with joint ownership of disclosed trade secrets
This version addresses joint ownership.
If trade secrets are jointly developed or disclosed during the term of this Agreement, both Parties agree to jointly own the rights to those trade secrets, subject to the confidentiality obligations and restrictions outlined in this Agreement.
Trade secrets clause with no licensing of trade secrets
This clause restricts licensing of trade secrets.
The Parties agree that no license or right to use the trade secrets provided under this Agreement is granted unless explicitly stated. The receiving Party acknowledges that the trade secrets remain the exclusive property of the disclosing Party.
Trade secrets clause with provision for third-party audits of trade secrets protection
This version includes third-party audits.
The disclosing Party shall have the right to engage an independent third-party auditor to review and verify the receiving Party’s compliance with the trade secrets protection measures set forth in this Agreement.
Trade secrets clause with obligation to return trade secrets upon request
This clause allows for the return of trade secrets upon request.
Upon the request of the disclosing Party, the receiving Party agrees to promptly return all trade secrets in their possession and cease all use of such trade secrets, and any copies or derivatives of them.
Trade secrets clause with compensation for breach of trade secrets
This version includes compensation for breach.
The receiving Party acknowledges that any unauthorized disclosure or use of trade secrets may result in financial harm to the disclosing Party, and agrees to compensate the disclosing Party for any losses incurred due to such breach.
Trade secrets clause with protection of trade secrets in joint projects
This clause applies to joint projects.
In the event the Parties engage in joint projects or collaborations, both Parties agree to protect the trade secrets exchanged during such projects in accordance with the terms of this Agreement and shall implement additional safeguards as necessary.
Trade secrets clause with protection of confidential designs
This version includes protection for designs.
The Parties agree that any designs, blueprints, or technical drawings exchanged under this Agreement are trade secrets. The receiving Party shall not use, disclose, or reproduce any such materials without the prior written consent of the disclosing Party.
Trade secrets clause with disclosure of trade secrets for legal compliance
This clause allows for disclosure to comply with the law.
In the event the receiving Party is required to disclose trade secrets under applicable law, regulation, or subpoena, the receiving Party shall immediately notify the disclosing Party and provide reasonable assistance in seeking protective measures.
Trade secrets clause with prohibition on employee solicitation
This clause prevents solicitation of employees.
The receiving Party agrees not to solicit, hire, or engage any employee of the disclosing Party who had access to trade secrets under this Agreement for a period of [X] years after the termination of this Agreement.
Trade secrets clause with restriction on competitive use
This version prevents competitive use of trade secrets.
The receiving Party agrees that any trade secrets disclosed under this Agreement shall not be used for any purpose that directly competes with the disclosing Party’s business during the term of this Agreement and for [X] years thereafter.
Trade secrets clause with indemnification for third-party violations
This clause includes indemnification for third-party breaches.
If a third party unlawfully obtains or uses trade secrets disclosed under this Agreement, the receiving Party agrees to indemnify the disclosing Party for any damages, legal fees, and costs incurred in enforcing the trade secret protections.
Trade secrets clause with restriction on access to trade secrets
This version limits access to trade secrets.
The receiving Party agrees to limit access to trade secrets to only those employees or contractors who need such access to fulfill their responsibilities under this Agreement, and such individuals must sign confidentiality agreements prior to accessing the information.
Trade secrets clause with notice of unauthorized access
This clause requires notice of unauthorized access.
In the event of any unauthorized access to trade secrets, the receiving Party shall notify the disclosing Party immediately and take all necessary steps to secure and recover the trade secrets.
Trade secrets clause with exclusion of certain data
This version excludes certain data from being considered trade secrets.
The Parties agree that publicly available data, general industry knowledge, or information independently developed by the receiving Party shall not be considered trade secrets under this Agreement and are not subject to the confidentiality obligations.
Trade secrets clause with notification of breach by subcontractors
This clause includes subcontractors in breach notifications.
The receiving Party agrees to ensure that any subcontractors or agents who have access to trade secrets are bound by the same confidentiality obligations as outlined in this Agreement and shall immediately notify the disclosing Party in the event of a breach by any subcontractor.
Trade secrets clause with disclosure for business continuity
This version allows disclosure for business continuity.
The Parties may disclose trade secrets to their affiliates or successors in the event of a merger, acquisition, or business continuity plan, provided that such entities agree to comply with the confidentiality obligations of this Agreement.
Trade secrets clause with requirement for third-party agreements
This clause requires third parties to sign agreements.
The receiving Party agrees to ensure that any third parties with access to trade secrets are required to sign confidentiality agreements that include provisions equal to or more restrictive than those in this Agreement.
Trade secrets clause with clarification of ownership rights
This version clarifies ownership of trade secrets.
The Parties agree that all trade secrets provided under this Agreement shall remain the exclusive property of the disclosing Party, and the receiving Party shall not assert any claim of ownership or rights to the trade secrets.
Trade secrets clause with protection of source code
This version applies to source code.
The Parties agree that the source code, including any modifications or improvements, provided under this Agreement shall be treated as trade secrets, and the receiving Party shall not decompile, reverse engineer, or otherwise attempt to recreate the source code.
Trade secrets clause with legal action in case of disclosure
This clause allows for legal action in the case of disclosure.
The Parties agree that the disclosing Party may take legal action to prevent any unauthorized use or disclosure of trade secrets, and the receiving Party agrees to cooperate fully in any legal proceedings that result from such a breach.
Trade secrets clause with protection for customer data
This version includes customer data protection.
The Parties agree that any customer data shared in connection with this Agreement constitutes trade secrets and shall be treated with the highest level of confidentiality, subject to applicable privacy laws.
Trade secrets clause with periodic review of trade secret protection measures
This clause provides for periodic reviews.
The receiving Party agrees to conduct periodic reviews of the trade secret protection measures in place to ensure compliance with the confidentiality obligations outlined in this Agreement and to take corrective actions if necessary.
Trade secrets clause with no implied waiver of confidentiality
This version ensures no implied waiver.
Any delay or failure by the disclosing Party to enforce the confidentiality obligations with respect to trade secrets under this Agreement shall not be construed as a waiver of the right to enforce these provisions at any time in the future.
Trade secrets clause with duty to mitigate damages
This clause includes a duty to mitigate damages.
In the event of unauthorized disclosure or use of trade secrets, the receiving Party shall take all reasonable steps to mitigate the damages resulting from such breach, including preventing further unauthorized access or disclosure.
Trade secrets clause with extended confidentiality period
This version extends the confidentiality period.
The confidentiality obligations of the receiving Party with respect to trade secrets shall continue for a period of [X] years after the termination of this Agreement or until the trade secrets are no longer confidential, whichever occurs first.
Trade secrets clause with provision for additional protective measures
This clause provides for additional protection.
In addition to the confidentiality obligations set forth in this Agreement, the Parties agree to implement additional protective measures, including encryption and restricted access controls, to safeguard the trade secrets during and after the term of this Agreement.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.