Confidentiality agreements: the exceptions

A properly drafted confidentiality clause also addresses the exceptions, usually four of a kind, sometimes split into five or even six (addressing the same matters); or three exemptions plus a clause dealing with court orders. This blog is about those exceptions.

A properly drafted confidentiality clause also addresses the exceptions, even though they may well be presupposed or raised as a defence against a claim for breach:

2.3              Exceptions. The restrictions and obligations in this [Agreement][Article] shall not apply to the Disclosing Party’s Confidential Information, which:
(a)     is or becomes generally available to the public other than as a result of a disclosure by the Receiving Party (or its representatives);
(b)     was received by the Receiving Party from a third party and not indirectly from the Disclosing Party in violation of any obligation of secrecy or non-use; or
(c)     was in the possession of the Receiving Party prior to disclosure or was developed independently from such Confidential Information, as is shown by competent evidence.

2.4              Court orders. In case Confidential Information is required to be disclosed by the Receiving Party by virtue of a court order or statutory duty, the Receiving Party shall be allowed to do so, provided that it shall, without delay, inform the Disclosing Party in writing of receipt of such order or coming into existence of such duty and enable the Disclosing Party reasonably to seek protection against such order or duty.

2.5              Specific Confidential Information shall not be deemed to be within the exceptions merely because it is embraced by more general information in the public domain or by more general information in the possession of the Receiving Party. In addition, any combination of information shall not be deemed to be within the foregoing exceptions merely because all individual parts of such information are in the public domain or in the possession of the Receiving Party.

The exceptions under sections 2.3 and 2.4 are common and presumably self-explanatory. Under section 2.3, the information itself is exempted from the scope of the agreement, whereas under section 2.4 an additional obligation to disclose with a corresponding right to act is necessary.
Section 2.5 mitigates the scope of the exemption under 2.3(a). In several contexts, section 2.5 will be unnecessary. It protects inventions, analyses, ideas and know-how, which combine in a somewhat unorthodox manner two or more public (non-confidential) things, facts or events. The information to be covered by the confidentiality obligation is then limited to the mere combining of those things, facts or events.

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