Overview

Most confidentiality agreements define the term "Confidential Information." We propose a new concept called "Protected Information," which is intended to align the term with other emerging standards of data protection, such as personal and government information.

The Confidential Information clause defines what the parties deem to be proprietary and protected by the terms of the agreement. The clause typically defines what is, and what is not, confidential.

Scope: what is the scope confidential information? What is included?
(a) Broad (all non-public)
(b) Narrow (date defined)
(c) Marked
(d) Specific information (business, financial, technical)

Our analysis shows that the definition of the excluded items is very consistent, while the definition of the information covered by the provisions is highly variable.

As noted by Yoichiro ("Yokum") Taku, a partner at Wilson Sonsini Goodrich & Rosati, "[th]e discloser will want a broad definition of confidential information and may also want third party confidential information to be deemed confidential. The receiver will want to narrow the definition of confidential information in order to limit the scope of the information requiring compliance with confidentiality obligations. What is important in a confidentiality agreement or non-disclosure agreement (NDA)? VCs may not want an agreement fearing such attribution of information and may prefer a Non-Confidentiality Agreement, providing that the parties may freely use all information disclosed.