Defining confidential information is critical to any confidentiality agreement.
Specifying the types of protectable information that are distinct to a Company can ensure enforceability of the Agreement later on. Among the categories of information commonly defined as confidential are trade secrets. Trade secrets are protected under state law if the information meets specific criteria. The Pennsylvania Uniform Trade Secrets Act defines a trade secret as information including a formula, drawing, pattern, compilation (including a customer list), program, device, technique, or process that derives actual or potential independent economic value because it is not generally known by others or it is not readily ascertainable by proper means by others who can gain economic value from the disclosure or use of such information. The information must be the subject of substantial efforts to maintain its secrecy.
If a Company believes it has or may have trade secrets, it is prudent to include trade secrets in the definition of confidential information. Further, while the term of the Confidentiality Agreement will be limited in duration, the Confidentiality Agreement should state that the protection of trade secrets survives the term of the Agreement for as long as such information remains a trade secret under applicable law.
This post was written by Allyson Kreps