An NDA Leads to the Loss of Trade Secrets, a Failed Deal and No Recourse
November 3, 2022
Trade secrets are always at risk when engaging in corporate deals that require the disclosure of confidential information. Though there is no sure-fire solution to protecting a company’s trade secrets, if handled properly, there is legal recourse to help mitigate any loss and deter trade secret theft. In a recent decision, the 8th Circuit affirmed the grant of a motion to dismiss a breach of contract action between a company and its financial advising firm.
This decision, presented in greater detail in our Trade Secrets Trends blog here, presents a number of lessons and issues for corporate deals.
- Be clear in the body of the agreement who the parties are to the contract
- Confirm all contract fields are complete and accurately represent the parties’ intent
- Before disclosing confidential information, confirm that the parties participating in any confidential communications are operating under, and subject to, the same terms of the agreement (this confirmation can be both verbal and written)
- Should the parties decide to include terms that absolve another party of potential liability, consider leaving narrow exceptions for claims, such as willful misconduct, gross negligence, and breach of contract