TRADE SECRET PROTECTION AGREEMENT
(Illinois Law – State Court Forum / Mandatory Injunctive Relief / Arbitration Preference)
[// GUIDANCE: This template is drafted to comply with the Illinois Trade Secrets Act (commonly cited as 765 ILCS 1065/1 et seq.) and prevailing U.S. Uniform Trade Secrets Act principles. Replace all bracketed placeholders before execution and confirm consistency with the client’s specific circumstances.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Agreement.
This Trade Secret Protection Agreement (“Agreement”) is entered into as of [Effective Date] (the “Effective Date”) by and between:
a. [Disclosing Party Legal Name], a [State] [Entity Type] with its principal place of business at [Address] (“Discloser”); and
b. [Receiving Party Legal Name], a [State] [Entity Type] with its principal place of business at [Address] (“Recipient”).
Discloser and Recipient are sometimes referred to individually as a “Party” and collectively as the “Parties.”
1.2 Recitals.
A. Discloser possesses certain valuable Trade Secrets (as defined below).
B. Recipient desires to access such Trade Secrets solely for [describe specific business purpose] (the “Purpose”) and agrees to protect and use them only under the terms of this Agreement.
C. The Parties acknowledge that unauthorized use or disclosure of Trade Secrets would cause irreparable harm to Discloser.
NOW, THEREFORE, in consideration of the mutual covenants herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows:
2. DEFINITIONS
The following terms, when capitalized, have the meanings set forth below. Terms defined in the singular include the plural and vice versa.
“Affiliate” – any entity controlling, controlled by, or under common control with a Party, where “control” means direct or indirect ownership of ≥50 % of voting securities.
“Confidential Information” – all non-public information disclosed by Discloser to Recipient, in any form, that (i) is designated as confidential, or (ii) a reasonable person would understand to be confidential given the nature of the information and circumstances of disclosure; provided, however, that Confidential Information includes but is not limited to Trade Secrets.
“Improper Means” – theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secrecy, or espionage through electronic or other means.
“Misappropriation” – (i) acquisition of a Trade Secret by a person who knows or has reason to know that the Trade Secret was acquired by Improper Means; or (ii) disclosure or use of a Trade Secret without express or implied consent by a person who (a) used Improper Means to acquire it, or (b) at the time of disclosure or use knew or had reason to know it was derived from Improper Means, owed a duty to maintain secrecy, or derived from a person owing such duty.
“Purpose” – [as stated in Section 1.2(B)].
“Representatives” – a Party’s and its Affiliates’ directors, officers, employees, contractors, advisors, and agents who have a legitimate need to know the Trade Secrets for the Purpose and who are bound by confidentiality obligations no less protective than those herein.
“Trade Secret” – information, including but not limited to technical or non-technical data, formulas, patterns, compilations, programs, devices, methods, techniques, or processes that: (i) derive independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use; and (ii) are the subject of efforts that are reasonable under the circumstances to maintain their secrecy.
[// GUIDANCE: This definition mirrors the statutory language under the Illinois Trade Secrets Act and should not be narrowed unless client-specific facts justify doing so.]
3. OPERATIVE PROVISIONS
3.1 Grant of Access.
Subject to the terms and conditions of this Agreement, Discloser may disclose Trade Secrets to Recipient solely for the Purpose. No license or other rights, by implication or otherwise, are granted except as expressly set forth herein.
3.2 Recipient’s Obligations.
a. Use. Recipient shall use the Trade Secrets exclusively for the Purpose and for no other purpose whatsoever.
b. Standard of Care. Recipient shall protect the Trade Secrets with the same degree of care it uses to protect its own confidential information of like importance, but in no event with less than a commercially reasonable standard of care.
c. Access Limitation. Recipient shall disclose Trade Secrets only to Representatives who: (i) have a bona fide need to know for the Purpose; and (ii) are bound by written confidentiality obligations at least as protective as those herein.
d. Prohibited Actions. Without limiting the foregoing, Recipient shall not (i) reverse engineer, disassemble, or decompile any tangible embodiments containing Trade Secrets; (ii) remove or modify any confidentiality or proprietary legends; or (iii) contest Discloser’s ownership of the Trade Secrets.
3.3 Return or Destruction.
Upon the earlier of (a) Discloser’s written request, or (b) completion or termination of the Purpose, Recipient shall promptly: (i) cease all use of the Trade Secrets; (ii) return or destroy all tangible embodiments (including all copies, notes, and summaries); and (iii) certify in writing its compliance with this Section.
3.4 Duration of Obligation.
The obligations in this Agreement shall continue with respect to each Trade Secret until such time as the information ceases to qualify as a Trade Secret through no fault of Recipient or its Representatives.
3.5 Compliance with Law.
If Recipient is legally compelled by court order, subpoena, or other governmental mandate to disclose any Trade Secret, Recipient shall, to the extent legally permissible, (i) provide Discloser with prompt written notice so that Discloser may seek a protective order, and (ii) disclose only that portion of the Trade Secret legally required to be disclosed.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Authority.
Each Party represents and warrants that: (a) it is duly organized, validly existing, and in good standing under applicable law; (b) it has full power and authority to enter into and perform this Agreement; and (c) the execution and performance of this Agreement have been duly authorized.
4.2 Discloser Disclaimer.
Except for the representations in Section 4.1, all Trade Secrets are provided “AS IS,” and Discloser makes no representations or warranties, express or implied, including warranties of accuracy, completeness, merchantability, fitness for a particular purpose, or non-infringement.
4.3 Survival.
The representations and warranties in this Section survive the expiration or termination of this Agreement.
5. COVENANTS & RESTRICTIONS
5.1 Affirmative Covenants of Recipient.
Recipient shall:
a. Implement and maintain administrative, technical, and physical safeguards reasonably designed to protect Trade Secrets from unauthorized use or disclosure;
b. Promptly notify Discloser in writing of any actual or suspected Misappropriation; and
c. Cooperate with Discloser, at Discloser’s expense, in any investigation or litigation relating to Misappropriation.
5.2 Negative Covenants of Recipient.
Recipient shall not, directly or indirectly, (i) contest the validity or ownership of the Trade Secrets; (ii) use Trade Secrets to develop, manufacture, or market products or services that compete with Discloser; or (iii) copy or reproduce Trade Secrets except as strictly necessary for the Purpose.
5.3 Notice & Cure.
Recipient shall have [number] days after receipt of written notice from Discloser to cure any breach of its obligations under this Agreement, except that no cure period applies to intentional Misappropriation or any breach that cannot be remedied by monetary damages alone.
6. DEFAULT & REMEDIES
6.1 Events of Default.
Any breach of Sections 3 or 5 constitutes a material default.
6.2 Injunctive Relief.
The Parties acknowledge that any breach or threatened breach of this Agreement may cause Discloser irreparable harm for which monetary damages are inadequate. Accordingly, Discloser is entitled to seek immediate equitable relief, including temporary, preliminary, and permanent injunctions, without posting bond or other security, in any court of competent jurisdiction.
6.3 Monetary Damages.
In addition to injunctive relief, Discloser may recover damages, including exemplary damages and attorneys’ fees where permitted by applicable law.
6.4 Attorney Fees & Costs.
The prevailing Party in any proceeding to enforce this Agreement is entitled to recover its reasonable attorneys’ fees, court costs, and other litigation expenses.
[// GUIDANCE: Illinois law permits recovery of reasonable attorney fees for willful and malicious Misappropriation. Consider expanding Section 6.3 if the client anticipates relying on that statutory remedy.]
7. RISK ALLOCATION
7.1 Indemnification by Recipient.
Recipient shall indemnify, defend, and hold harmless Discloser and its Affiliates, and their respective officers, directors, employees, and agents, from and against any and all losses, liabilities, damages, penalties, costs, and expenses (including reasonable attorneys’ fees) arising out of or relating to (a) any Misappropriation or breach of this Agreement by Recipient or its Representatives, or (b) Recipient’s negligent or willful misconduct.
7.2 Limitation of Liability.
NO LIMITATION OF LIABILITY SHALL APPLY; THE PARTIES EXPRESSLY AGREE THAT SECTION 7.1 IS NOT SUBJECT TO ANY CAP OR EXCLUSION.
[// GUIDANCE: The metadata specifies “no_cap.” If the client later wishes to introduce proportionality, insert an appropriate cap here.]
7.3 Insurance.
Recipient shall maintain, at its own expense, commercially reasonable cyber liability or professional liability insurance covering acts of Misappropriation, with minimum limits of [USD Amount] per claim and in the aggregate, and shall provide certificates of insurance upon request.
7.4 Force Majeure.
Neither Party is liable for delay or failure in performance due to causes outside its reasonable control, provided that the affected Party gives prompt written notice and resumes performance as soon as practicable; provided, however, that this Section does not excuse Recipient’s confidentiality obligations.
8. DISPUTE RESOLUTION
8.1 Governing Law.
This Agreement is governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict-of-laws principles.
8.2 Forum Selection & Injunctive Relief.
For purposes of seeking injunctive or other equitable relief under Section 6.2, the Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [County], Illinois, and waive any objection to venue or inconvenient forum.
8.3 Arbitration.
Except for actions for injunctive or equitable relief expressly permitted under Section 8.2, any controversy or claim arising out of or relating to this Agreement shall be finally settled by confidential arbitration administered by [Arbitration Institution] under its [Arbitration Rules] in effect at the time of filing. The place of arbitration shall be [City], Illinois. Judgment on the award may be entered in any court of competent jurisdiction.
8.4 Jury Trial Waiver.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY COURT PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
9. GENERAL PROVISIONS
9.1 Amendment; Waiver.
No amendment or waiver of any provision of this Agreement is effective unless in a writing signed by both Parties. A waiver on one occasion is not a waiver of any subsequent breach.
9.2 Assignment.
Recipient may not assign or delegate this Agreement, in whole or in part, without Discloser’s prior written consent. Any attempted assignment in violation of this Section is void. This Agreement binds and benefits the Parties and their permitted successors and assigns.
9.3 Severability.
If any provision of this Agreement is held unenforceable, such provision shall be reformed only to the extent necessary to make it enforceable, and the remaining provisions shall remain in full force and effect.
9.4 Integration.
This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous oral or written agreements.
9.5 Counterparts; Electronic Signatures.
This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically (e.g., PDF or via reputable e-signature platform) are deemed original and binding.
9.6 Notices.
All notices under this Agreement must be in writing and delivered by (i) certified mail (return receipt requested), (ii) nationally recognized overnight courier, or (iii) email with confirmation of receipt, to the addresses set forth below or such other address as either Party may designate in writing.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| Discloser | Recipient |
|---|---|
| [Disclosing Party Legal Name] | [Receiving Party Legal Name] |
| By: ____ | By: ____ |
| Name: [Printed Name] | Name: [Printed Name] |
| Title: [Title] | Title: [Title] |
| Date: ________ | Date: ________ |
[Optional Notary Acknowledgment Block – Include if required by internal policy or transaction specifics.]
[// GUIDANCE: Before final execution, confirm that:
1. The Purpose is clearly and narrowly defined.
2. Insurance limits align with risk profile.
3. Arbitration institution and rules are selected and acceptable to the client.
4. County venue is specified (e.g., “Cook County, Illinois”).
5. Any export-controlled information is addressed in a compliance clause if applicable.]