Trade Secret Agreement - California

TRADE SECRET PROTECTION AND NON-DISCLOSURE AGREEMENT

(California-Law Form – CUTSA Compliant)

TABLE OF CONTENTS

I. Document Header
II. Definitions
III. Operative Provisions
IV. Representations & Warranties
V. Covenants & Restrictions
VI. Default & Remedies
VII. Risk Allocation
VIII. Dispute Resolution
IX. General Provisions
X. Execution Block

I. DOCUMENT HEADER

1. Agreement. This Trade Secret Protection and Non-Disclosure Agreement (this “Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between:
   a. [Full Legal Name of Discloser], a [State] [Entity Type] with its principal place of business at [Address] (“Discloser”); and
   b. [Full Legal Name of Recipient], a [State] [Entity Type] with its principal place of business at [Address] (“Recipient”).

Discloser and Recipient are each a “Party” and, collectively, the “Parties.”

2. Recitals.
   WHEREAS, Discloser possesses certain valuable Trade Secrets (defined below);
   WHEREAS, Recipient desires to receive, and Discloser is willing to disclose, such Trade Secrets solely for [describe purpose – e.g., “evaluating a potential business relationship regarding…”] (the “Purpose”); and
   WHEREAS, the Parties intend that all Trade Secrets remain confidential and that their disclosure be strictly limited to the Purpose;

NOW, THEREFORE, in consideration of the mutual promises herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:

II. DEFINITIONS

For ease of reference, the following terms have the meanings set forth below. Terms defined in this Section are capitalized throughout the Agreement. Unless otherwise stated, section references are to this Agreement.

“Affiliate” – Any entity that directly or indirectly controls, is controlled by, or is under common control with a Party, where “control” means beneficial ownership of >50 % of the voting interests or the power to direct management.

“Confidential Information” – Information disclosed by Discloser to Recipient in any form that (a) is marked or identified as confidential, or (b) a reasonable person would understand to be confidential under the circumstances. Confidential Information includes Trade Secrets but excludes information that is independently developed by Recipient without reference to Discloser’s information, is lawfully obtained from a third party without breach of duty, or becomes publicly available through no fault of Recipient.

“Misappropriation” – Has the meaning set forth in Cal. Civ. Code § 3426.1(b).

“Person” – Any natural person, corporation, partnership, limited liability company, trust, unincorporated association, governmental body, or other entity.

“Representative” – A Party’s and its Affiliates’ directors, officers, employees, agents, advisors, and professional consultants who have a need to know the Confidential Information for the Purpose and who are bound by confidentiality obligations no less restrictive than those herein.

“Trade Secrets” – Information meeting the definition of a “trade secret” under the California Uniform Trade Secrets Act, Cal. Civ. Code § 3426.1(d), and any amendments thereto, including all technical, financial, and business information, whether tangible or intangible, that derives independent economic value from not being generally known and is subject to reasonable efforts to maintain secrecy.

III. OPERATIVE PROVISIONS

3.1 Disclosure & Receipt of Trade Secrets

a. Scope. Discloser may, in its sole discretion, disclose Trade Secrets to Recipient solely for the Purpose.
b. Format & Delivery. Trade Secrets may be disclosed orally, visually, electronically, or in writing.

3.2 Use & Non-Disclosure Obligations

a. Limited Use. Recipient shall use Trade Secrets only for the Purpose and for no other purpose, whether commercial or otherwise.
b. Protection Standard. Recipient shall protect all Trade Secrets using at least the same degree of care it uses to protect its own highly sensitive information, but not less than a commercially reasonable standard of care.
c. Restricted Disclosure. Except for disclosures protected by Section 9.7, Recipient shall disclose Trade Secrets only to its Representatives who (i) have a bona fide need to know for the Purpose and (ii) are bound by written obligations of confidentiality and restricted use no less stringent than those contained herein.
d. Notice of Unauthorized Use. Recipient shall promptly (and in any event within two (2) business days) notify Discloser in writing of any actual or suspected Misappropriation or unauthorized use or disclosure of Trade Secrets.

3.3 Exceptions

Recipient’s obligations under Section 3.2 do not apply to information that Recipient establishes by written evidence:

1. was in Recipient’s lawful possession without restriction before disclosure by Discloser;
2. becomes publicly available through no act or omission of Recipient;
3. is rightfully received from a third party without breach of any confidentiality obligation; or
4. is independently developed by Recipient without reference to the Trade Secrets.

3.4 Legally Compelled Disclosure

If Recipient is required by law, subpoena, or court order to disclose any Trade Secret, Recipient shall, to the extent lawful and except for disclosures protected by Section 9.7, (i) provide prompt written notice to Discloser to allow Discloser to seek protective relief, and (ii) disclose only that portion of the Trade Secret legally required, using reasonable efforts to obtain confidential treatment. Section 9.7 does not require advance notice to Discloser.

3.5 No License

Nothing in this Agreement grants Recipient any license or other right under any patent, copyright, trademark, or other intellectual property of Discloser, except the limited right to use the Trade Secrets for the Purpose.

IV. REPRESENTATIONS & WARRANTIES

4.1 Mutual Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement and that doing so does not violate any other agreement to which it is a party.

4.2 Discloser Disclaimer. Trade Secrets are provided “AS IS.” Discloser makes no representation or warranty, express or implied, regarding accuracy, completeness, non-infringement, or fitness for a particular purpose.

4.3 Recipient Capability. Recipient represents that it has (a) adequate internal controls to protect Trade Secrets, and (b) the financial and operational capacity to perform its obligations hereunder.

4.4 Survival. All representations and warranties survive the termination of this Agreement for a period of three (3) years, except that obligations respecting Trade Secrets survive for so long as the information remains a Trade Secret under applicable law.

V. COVENANTS & RESTRICTIONS

5.1 Non-Reverse Engineering. Recipient shall not analyze, decompile, disassemble, reverse engineer, or otherwise attempt to derive the composition or underlying information of any Trade Secret disclosed under this Agreement, except as expressly permitted in writing by Discloser. This is a contractual restriction; reverse engineering or independent derivation alone is not improper means under Cal. Civ. Code § 3426.1(a).

5.2 Compliance with Law. Recipient shall comply with all applicable export-control, data-privacy, and trade-sanctions laws in connection with its handling of Trade Secrets.

5.3 Return or Destruction. Upon the earlier of (a) Discloser’s written request or (b) completion of the Purpose, Recipient shall promptly, and in any event within five (5) business days, return or destroy all tangible embodiments of Trade Secrets, and certify such destruction in writing.

5.4 No Unauthorized Use. Recipient shall not use Discloser's Trade Secrets outside the Purpose, including to divert a specific business opportunity learned through those Trade Secrets. This clause does not restrict lawful competition based on independently developed or publicly available information and does not impose a noncompete obligation.

VI. DEFAULT & REMEDIES

6.1 Events of Default. Each of the following constitutes an “Event of Default”:
a. Any Misappropriation or other material breach of Section 3 or Section 5 by Recipient;
b. Recipient’s failure to timely provide notice under Section 3.2(d); or
c. Recipient’s breach of its indemnification obligations under Section 7.1.

6.2 Notice & Cure. Discloser shall provide written notice specifying the Event of Default. Where the default is curable, Recipient has five (5) calendar days to cure. Misappropriation is deemed incurable.

6.3 Remedies. Upon an Event of Default, Discloser may seek, subject to proof and the court's determination:
a. An injunction against actual or threatened Misappropriation under Cal. Civ. Code § 3426.2;
b. Actual-loss damages and any unjust enrichment not counted in that loss under Cal. Civ. Code § 3426.3(a), or a reasonable royalty when neither is provable under § 3426.3(b); exemplary damages are available only for willful and malicious Misappropriation, within the limit in § 3426.3(c);
c. Reasonable attorney's fees and costs to a prevailing party only in the circumstances stated in Cal. Civ. Code § 3426.4; and
d. Any other remedy that is available under applicable law.

VII. RISK ALLOCATION

7.1 Indemnification by Recipient

Recipient shall, to the fullest extent permitted by law, indemnify, defend, and hold harmless Discloser, its Affiliates, and their respective Representatives (collectively, “Indemnitees”) from and against any and all losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to (a) any Misappropriation or unauthorized use/disclosure of Trade Secrets by Recipient or its Representatives, and (b) Recipient’s breach of this Agreement.

7.2 Insurance

Recipient shall maintain, at its own expense, commercially reasonable cyber-liability and general liability insurance covering unauthorized disclosure of confidential information, with minimum limits of [Insert Amount] per occurrence and in the aggregate, and shall provide certificates of insurance upon request.

7.3 No Limitation of Liability

The Parties agree that no provision of this Agreement shall be construed to limit Recipient’s liability for breach of its confidentiality, non-use, or indemnification obligations.

VIII. DISPUTE RESOLUTION

8.1 Governing Law

This Agreement and any dispute arising hereunder are governed by and construed in accordance with the laws of the State of California (without regard to its conflict-of-laws principles).

8.2 Forum Selection & Injunctive Relief

The state courts of [County, California] (and, where federal jurisdiction exists, the U.S. District Court for the [Central/Northern/Southern/Eastern] District of California) shall have exclusive jurisdiction for (i) any action seeking injunctive relief, or (ii) enforcement of an arbitral award.

8.3 Binding Arbitration

Except for actions described in Section 8.2, any dispute, claim, or controversy arising out of or related to this Agreement shall be finally resolved by confidential, binding arbitration administered by [JAMS/AAA] in accordance with its [Comprehensive/Commercial] Arbitration Rules. The arbitral tribunal shall consist of a single neutral arbitrator with at least ten (10) years of experience in complex commercial disputes. The arbitration shall be held in [City, California], and the award shall be final and binding, with judgment thereon enforceable in any court of competent jurisdiction.

8.4 California State-Court Jury Rights

This document does not itself waive a jury trial in a California state court. After an action is filed there, a party may waive that right only through a method permitted by applicable law.

IX. GENERAL PROVISIONS

9.1 Amendment & Waiver. The Parties intend amendments and express waivers to be in writing and signed by both Parties, subject to any modification or waiver that applicable law recognizes despite this clause (Cal. Civ. Code § 1698). A failure or delay in exercising a right does not, by itself, constitute a waiver.

9.2 Assignment. Recipient may not assign or delegate any of its rights or obligations under this Agreement, by operation of law or otherwise, without Discloser's prior written consent. An attempted assignment without required consent is a breach and is ineffective to the extent permitted by applicable law. This Agreement binds and benefits the Parties and their permitted successors and assigns.

9.3 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions remain in full force to the extent permitted by law. A court may reform an invalid provision only to the extent applicable law permits.

9.4 Integration. This Agreement constitutes the entire agreement between the Parties regarding its subject matter and supersedes all prior or contemporaneous oral or written understandings.

9.5 Electronic Signatures & Counterparts. This Agreement may be executed in any number of counterparts, each of which is deemed an original, and all of which together constitute one instrument. To the extent permitted by applicable law, electronic signatures (including signed PDFs or a signature platform) have the same effect as signatures on paper (Cal. Civ. Code § 1633.7).

9.6 Notices. All notices must be in writing and delivered by personal delivery, nationally recognized overnight courier, certified mail (return receipt requested), or electronic mail (with confirmation of receipt), to the addresses set forth in the preamble (or as otherwise designated in writing). Notice is deemed given on receipt.

9.7 Whistleblower Immunity Notice. Under 18 U.S.C. § 1833(b)(1), an individual is not criminally or civilly liable under federal or state trade-secret law for disclosing a trade secret (a) in confidence to a federal, state, or local government official, directly or indirectly, or to an attorney, solely to report or investigate a suspected violation of law; or (b) in a complaint or other document filed under seal in a lawsuit or other proceeding. Under § 1833(b)(2), an individual suing an employer for retaliation for reporting a suspected violation of law may disclose the trade secret to the individual's attorney and use it in the proceeding if any document containing the secret is filed under seal and the individual does not otherwise disclose it except by court order. These protected disclosures do not require Discloser's advance consent or notice. For an employer's agreement with an employee governing trade secrets or confidential information, this notice also applies to an individual contractor or consultant under § 1833(b)(3)-(4). This immunity does not authorize unlawful access to material (§ 1833(b)(5)).

X. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

End of Document