Trade Secret Agreement

TRADE SECRET AND CONFIDENTIALITY AGREEMENT — ALABAMA

This Trade Secret and Confidentiality Agreement (the “Agreement”) is entered into as of [EFFECTIVE DATE] by and between:

Discloser: [FULL LEGAL NAME], a [JURISDICTION AND ENTITY TYPE / INDIVIDUAL], with an address at [ADDRESS]; and

Recipient: [FULL LEGAL NAME], a [JURISDICTION AND ENTITY TYPE / INDIVIDUAL], with an address at [ADDRESS].

The parties wish to evaluate or perform [DESCRIBE THE SPECIFIC PROJECT, TRANSACTION, OR SERVICES] (the “Purpose”). Discloser may provide limited information for that Purpose subject to this Agreement.

1. Scope and Classification

1.1 Confidential Information

“Confidential Information” means nonpublic information disclosed by or for Discloser that:

• is marked or identified as confidential when disclosed;
• is confirmed as confidential in writing within [15] days after an oral or visual disclosure; or
• reasonably should be understood as confidential from its nature and the circumstances of disclosure.

Confidential Information may include business plans, pricing, forecasts, customer or supplier information, designs, specifications, formulas, patterns, compilations, software, drawings, devices, methods, techniques, processes, security information, and other information described in Schedule 1.

1.2 Trade Secrets

“Trade Secret” means Confidential Information that independently satisfies every applicable requirement of Ala. Code § 8-27-2(1), including the statutory requirements concerning business use or intended use, covered form, lack of public or general knowledge, lack of ready ascertainability from public information, reasonable secrecy efforts, and significant economic value.

The parties' label does not by itself make information a statutory Trade Secret. Information may be protected by this Agreement even when it does not qualify for a statutory trade-secret remedy.

1.3 Representatives

“Representative” means a Recipient employee, officer, director, attorney, accountant, contractor, consultant, or other person who:

• needs the information for the Purpose;
• receives only the information reasonably needed;
• is informed of its confidential nature; and
• is bound by confidentiality and use restrictions at least as protective as the applicable restrictions in this Agreement.

Recipient remains responsible for a Representative's use or disclosure to the extent provided by the parties' negotiated allocation of responsibility and applicable law.

2. Information Not Covered

Recipient may establish, using contemporaneous records, that particular information:

• was lawfully known to Recipient without a confidentiality duty before Discloser provided it;
• becomes public through no breach of this Agreement or other duty;
• is received lawfully from a third party without a confidentiality duty;
• is independently developed without use of or reference to Confidential Information; or
• is approved for release in a writing signed by Discloser.

A combination of public elements is not automatically excluded if the nonpublic combination itself remains protected.

3. Recipient Duties

Recipient shall:

1. use Confidential Information only for the Purpose;
2. disclose it only to authorized Representatives;
3. protect it using at least reasonable care and no less care than Recipient uses for comparable information of its own;
4. follow the specific safeguards in Schedule 2;
5. not copy, download, transmit, or retain more than reasonably necessary for the Purpose;
6. not remove confidentiality, ownership, or security markings;
7. not reverse engineer, decompile, disassemble, analyze, or derive underlying structure from identified materials except to the extent the parties expressly permit in Schedule 3 or applicable law does not permit the restriction; and
8. promptly notify Discloser after discovering a suspected unauthorized access, use, or disclosure, preserve relevant evidence, take reasonable containment steps, and cooperate on a proportionate response.

This Agreement does not replace any separately applicable privacy, cybersecurity, export-control, health-information, financial-information, government-contract, professional-secrecy, or records law. Identify required addenda here: [NONE / DESCRIBE].

4. Permitted and Required Disclosures

4.1 Legally Required Disclosure

If Recipient is legally required to disclose Confidential Information, Recipient shall, to the extent lawful:

• give Discloser prompt notice sufficient to permit a request for protection;
• disclose only the portion counsel determines is legally required; and
• reasonably cooperate, at Discloser's expense, with a lawful request for confidential treatment.

Nothing in this subsection requires notice to Discloser before a disclosure protected by Section 4.2.

4.2 Protected Reports and Filings — 18 U.S.C. § 1833(b)

An individual is not criminally or civilly liable under federal or state trade-secret law for disclosing a trade secret:

• in confidence, directly or indirectly, to a federal, state, or local government official or to an attorney, solely to report or investigate a suspected violation of law; or
• in a complaint or other document filed under seal in a lawsuit or other proceeding.

An individual suing an employer for retaliation based on reporting a suspected violation of law may disclose the trade secret to the individual's attorney and use it in the proceeding if documents containing it are filed under seal and it is not otherwise disclosed except by court order.

This notice applies whenever Recipient is an employee or an individual performing work as a contractor or consultant for an employer. It does not authorize unlawful access or acquisition of information.

4.3 Other Protected Activity

Nothing in this Agreement prohibits a disclosure, report, communication, or participation that applicable law protects. Recipient is not required to obtain Discloser's approval for protected activity.

5. Ownership; No Implied License; No Commitment

As between the parties, Discloser retains its rights in the Confidential Information. No patent, copyright, trademark, trade-secret, data, or other intellectual-property license is granted except the limited right to use Confidential Information for the Purpose.

Neither party is required to disclose information, enter another transaction, continue discussions, or purchase or provide goods or services unless a separate signed agreement says otherwise.

Discloser represents only that it may provide the disclosed information for the Purpose. Any broader accuracy, completeness, noninfringement, merchantability, fitness, or transaction warranty must appear in the separate transaction agreement.

6. Return, Destruction, and Retention

Upon Discloser's written request or completion of the Purpose, Recipient shall within [10] business days:

• stop using the requested Confidential Information;
• return or securely destroy reasonably accessible copies as Discloser directs; and
• if requested, provide a certification signed by [AUTHORIZED PERSON].

Recipient may retain copies only to the extent required by law, professional recordkeeping duties, a documented litigation hold, or routine backup systems not reasonably accessible in ordinary operations. Retained information remains subject to this Agreement and may not be used for another purpose.

7. Duration

This Agreement begins on the Effective Date. The duty protecting non-trade-secret Confidential Information continues for [NUMBER] years after [EACH DISCLOSURE / TERMINATION].

Obligations concerning a Trade Secret continue while the information satisfies applicable statutory requirements. Contract duration does not decide whether information qualifies as a Trade Secret or extend a statutory limitations period.

8. Alabama Trade-Secret Remedies

The Alabama Trade Secrets Act distinguishes breach of contract from statutory misappropriation. Under Ala. Code § 8-27-3, statutory liability requires proof of unprivileged disclosure or use and one of the circumstances the section identifies.

For proven actual or threatened misappropriation, Ala. Code § 8-27-4 authorizes the nonduplicative remedies specified there, including appropriate injunctive or equitable relief, attributable profits and benefits, and actual damages. Statutory attorney's fees and exemplary damages require the predicates stated in § 8-27-4; they are not automatic consequences of every contract breach.

An Alabama statutory misappropriation claim must be brought within two years after discovery or when reasonable diligence should have discovered it. Ala. Code § 8-27-5. This Agreement does not promise relief without the proof, security, procedure, defenses, or judicial findings applicable to the requested remedy.

Contract-Remedy Election

Select and have counsel review any additional contract remedy:

☐ No contractual prevailing-party fee clause; statutory and otherwise applicable fee rules control.

☐ Negotiated fee clause: [INSERT REVIEWED LANGUAGE].

☐ No indemnity beyond liability otherwise established by this Agreement and law.

☐ Negotiated third-party-claim indemnity: [DEFINE CLAIMS, PROCEDURE, CONTROL OF DEFENSE, EXCLUSIONS, AND LIMITS].

☐ No agreed liability cap or consequential-damages exclusion.

☐ Negotiated limitation: [INSERT REVIEWED LANGUAGE AND EXPRESSLY ADDRESS INTENTIONAL MISUSE, CONFIDENTIALITY, DATA, INDEMNITY, AND REMEDY FAILURE].

9. Disputes

This Agreement is governed by Alabama law, excluding a choice-of-law rule that would select another jurisdiction's law, subject to any nonwaivable law.

The parties consent to proceedings in [STATE OR FEDERAL COURT AND COUNTY/DISTRICT], if that forum has subject-matter jurisdiction and venue is valid. This clause does not itself create jurisdiction.

No arbitration agreement or predispute jury waiver is included. If the parties want arbitration, they should sign a separately reviewed clause identifying the administrator or rules, seat, court-relief boundary, confidentiality treatment, allocation of costs, and method for entering an award.

10. General Terms

1. Notices. Notices under this Agreement must be sent to the contacts below by [APPROVED METHODS]. A notice is effective at [DEFINED EVENT].
2. Assignment. Neither party may assign this Agreement without the other's written consent, except to [DEFINED SUCCESSOR, IF ANY]. An assignment does not expand the permitted Purpose.
3. Amendment and Waiver. An amendment or waiver must be in a writing signed by the party against whom it is asserted. A delay in enforcement is not itself a waiver.
4. Severability. If a provision is unenforceable, it shall be enforced only to the lawful extent, and the remainder shall continue if the essential exchange remains workable.
5. Entire Agreement. This Agreement is the parties' complete agreement concerning confidentiality for the Purpose, except for [IDENTIFY SURVIVING AGREEMENTS OR POLICIES]. It does not supersede a later transaction agreement unless that agreement expressly says so.
6. Counterparts and Electronic Signatures. The parties agree to transact electronically for this Agreement. Counterparts and electronic signatures may be used consistently with Ala. Code § 8-1A-7 and any agreed signing procedure.
7. No Publicity. Neither party may use the other's name, marks, or the existence of discussions in publicity without written permission, except for a legally required or protected disclosure.

11. Notices and Signatures

DISCLOSER

Name: [________________________________]

By: __________________________________

Printed name and title: [________________________________]

Date: [__/__/____]

RECIPIENT

Name: [________________________________]

By: __________________________________

Printed name and title: [________________________________]

Date: [__/__/____]

Schedule 1 — Information Categories and Exclusions

Schedule 2 — Required Safeguards

Schedule 3 — Permitted Technical Activity

☐ No testing, benchmarking, reverse engineering, decompilation, disassembly, or derivative analysis is permitted.

☐ The following activity is permitted under these conditions: [________________________________].

Sources and References

• Alabama Legislature, Code of Alabama, Ala. Code §§ 8-27-1 through 8-27-6 and § 8-1A-7.
• Office of the Law Revision Counsel, 18 U.S.C. § 1833; U.S. Government Publishing Office, codified § 1833 text.