TRADE SECRET PROTECTION & NON-DISCLOSURE AGREEMENT
(New Jersey Law – N.J. Stat. Ann. §§ 56:15-1 et seq.)
[// GUIDANCE: Replace all items in ALL-CAPS BRACKETS with deal-specific information before execution.]
This Trade Secret Protection & Non-Disclosure Agreement (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between [DISCLOSING PARTY NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Discloser”), and [RECEIVING PARTY NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS] (“Recipient,” and together with Discloser, the “Parties,” and each, a “Party”).
TABLE OF CONTENTS
- Definitions
- Exchange & Use of Trade Secrets
- Standard of Care; Protective Measures
- Exclusions
- Term; Return or Destruction of Materials
- Representations & Warranties
- Covenants & Restrictions
- Events of Default
- Remedies
- Indemnification; Risk Allocation
- Dispute Resolution
- General Provisions
- Execution
1. DEFINITIONS
For purposes of this Agreement, capitalized terms have the meanings set forth below. Any term not defined in this Section 1 shall have the meaning given to it elsewhere in this Agreement.
“Affiliate” – any entity that directly or indirectly controls, is controlled by, or is under common control with a Party, where “control” means ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest.
“Arbitration Rules” – the Commercial Arbitration Rules of the American Arbitration Association (“AAA”) in effect on the date a Claim is filed.
“Claim” – any dispute, controversy, or cause of action arising out of or relating to this Agreement, whether sounding in contract, tort, statute, or otherwise.
“Discloser” – has the meaning set forth in the preamble.
“Documentation” – any written, electronic, graphic, or other tangible materials embodying or reflecting a Trade Secret.
“Force Majeure Event” – an event beyond the reasonable control of a Party that renders performance impracticable, including acts of God, natural disasters, war, terrorism, riots, labor strikes (excluding those of the impacted Party’s employees), epidemic, pandemic, or governmental action.
“Misappropriation” – the acquisition, disclosure, or use of a Trade Secret of another without express or implied consent by a person who (a) used improper means to acquire knowledge of the Trade Secret; or (b) at the time of disclosure or use, knew or had reason to know the knowledge was derived from or through a person who had utilized improper means to acquire it, all as further defined under N.J. Stat. Ann. § 56:15-2.
“Recipient” – has the meaning set forth in the preamble.
“Trade Secret” – information, including a formula, pattern, business data, program, device, method, technique, or process, that (a) derives 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 (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy, consistent with N.J. Stat. Ann. § 56:15-2.
2. EXCHANGE & USE OF TRADE SECRETS
2.1 Limited Purpose. Recipient shall use Trade Secrets solely for the following purpose: [DESCRIBE PERMITTED PURPOSE] (the “Purpose”) and for no other purpose whatsoever.
2.2 No Transfer of Ownership. All Trade Secrets remain the exclusive property of Discloser. No license or other rights, by implication, estoppel, or otherwise, are granted except as expressly set forth herein.
2.3 Employees & Representatives. Recipient may disclose Trade Secrets only to its officers, directors, employees, agents, and external advisors (collectively, “Representatives”) who (a) have a bona fide need to know in connection with the Purpose, and (b) are bound by written obligations of confidentiality at least as protective as those contained herein.
3. STANDARD OF CARE; PROTECTIVE MEASURES
3.1 Degree of Care. Recipient shall protect Trade Secrets from unauthorized use or disclosure using at least the same degree of care it employs for its own confidential or proprietary information of like importance, but in no event less than a commercially reasonable standard of care.
3.2 Protective Actions. Without limitation, Recipient shall:
(a) implement and maintain administrative, technical, and physical safeguards designed to protect Trade Secrets;
(b) promptly notify Discloser in writing of any actual or suspected Misappropriation or unauthorized disclosure; and
(c) cooperate fully with Discloser to mitigate any harm and to regain possession or control of the Trade Secrets.
4. EXCLUSIONS
The obligations in Sections 2 and 3 do not apply to information that Recipient can demonstrate by contemporaneous written evidence:
(a) is or becomes publicly available without breach of this Agreement;
(b) was lawfully in Recipient’s possession prior to disclosure by Discloser;
(c) is obtained from a third party not in breach of any confidentiality obligation; or
(d) is independently developed by Recipient without use of or reference to Discloser’s Trade Secrets.
5. TERM; RETURN OR DESTRUCTION OF MATERIALS
5.1 Term. This Agreement commences on the Effective Date and continues for [TERM] years, unless earlier terminated pursuant to Section 8. The confidentiality obligations survive with respect to each Trade Secret for so long as such information remains a Trade Secret under applicable law.
5.2 Return/Destruction. Upon the earlier of (a) Discloser’s written request, or (b) termination or expiration of this Agreement, Recipient shall promptly (i) return or destroy all Trade Secrets and Documentation, including all copies, translations, and summaries; and (ii) upon Discloser’s request, certify in writing such return or destruction.
6. REPRESENTATIONS & WARRANTIES
6.1 Mutual Corporate Authority. Each Party represents that it has full power and authority to enter into and perform this Agreement.
6.2 Non-Infringement Warranty. Discloser represents that, to the best of its knowledge, disclosure of the Trade Secrets to Recipient in accordance with this Agreement does not infringe any third-party rights.
6.3 Disclaimer of Other Warranties. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION 6, (A) THE TRADE SECRETS ARE PROVIDED “AS IS,” AND (B) DISCLOSER DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS, IMPLIED, STATUTORY, OR OTHERWISE, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, AND NON-INFRINGEMENT.
7. COVENANTS & RESTRICTIONS
7.1 Compliance with Law. Recipient shall comply with all applicable federal, state, and local laws, including the New Jersey Trade Secrets Act, in handling Trade Secrets.
7.2 No Reverse Engineering. Recipient shall not analyze, decompile, reverse engineer, or disassemble any Trade Secret nor permit any third party to do so.
7.3 Publicity. Recipient shall not issue any press release or make any public statement concerning this Agreement or its subject matter without Discloser’s prior written consent.
8. EVENTS OF DEFAULT
8.1 Default. The occurrence of any of the following constitutes an “Event of Default”:
(a) Recipient’s breach of any material obligation under Sections 2–4 or 7;
(b) Recipient’s failure to timely cure any other breach within ten (10) days after receipt of written notice from Discloser; or
(c) Recipient’s insolvency, assignment for the benefit of creditors, or commencement of bankruptcy proceedings.
8.2 Cure Period. Where an Event of Default is capable of cure, the defaulting Party shall have the shorter of (a) the remaining cure period specified above, or (b) such period as is reasonable under the circumstances to prevent further Misappropriation.
9. REMEDIES
9.1 Injunctive Relief. Recipient acknowledges that unauthorized use or disclosure of Trade Secrets will cause Discloser irreparable harm for which monetary damages are inadequate; therefore, Discloser is entitled to seek immediate injunctive or other equitable relief in any court of competent jurisdiction without the necessity of posting bond.
9.2 Monetary Damages. In addition to equitable relief, Discloser may recover actual damages, unjust enrichment, and, in cases of willful and malicious Misappropriation, punitive damages and attorneys’ fees as permitted under N.J. Stat. Ann. § 56:15-4.
9.3 Cumulative Remedies. The rights and remedies herein are cumulative and in addition to any other rights or remedies available at law or in equity.
[// GUIDANCE: Liability Cap intentionally omitted per client mandate (“no_cap”).]
10. INDEMNIFICATION; RISK ALLOCATION
10.1 Recipient Indemnity. Recipient shall indemnify, defend, and hold harmless Discloser and its Affiliates, officers, directors, employees, and agents (each, a “Discloser Indemnitee”) from and against any and all claims, damages, losses, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of or related to (a) Recipient’s breach of this Agreement; (b) Misappropriation or other unauthorized use or disclosure of Trade Secrets by Recipient or its Representatives; or (c) Recipient’s violation of applicable law.
10.2 Insurance. Recipient shall, at its own expense, maintain commercially reasonable cyber liability or errors & omissions insurance covering liabilities that may arise under this Agreement, with minimum limits of [AMOUNT] per claim and in the aggregate, and shall furnish certificates of insurance upon request.
10.3 Force Majeure. Neither Party is liable for failure to perform caused by a Force Majeure Event, provided that prompt written notice is given and the impacted Party uses commercially reasonable efforts to resume performance.
11. DISPUTE RESOLUTION
11.1 Governing Law. This Agreement and any Claim are governed by and construed in accordance with the laws of the State of New Jersey, without regard to conflicts-of-law rules.
11.2 Arbitration. Except for actions seeking injunctive or other equitable relief under Section 9.1, any Claim shall be resolved by confidential, binding arbitration administered by the AAA under the Arbitration Rules. The seat of arbitration shall be [COUNTY], New Jersey. Judgment on the award may be entered in any court of competent jurisdiction.
11.3 Forum Selection for Equitable Relief. Each Party irrevocably submits to the exclusive jurisdiction of the state courts of New Jersey located in [COUNTY] County (or, if jurisdictionally appropriate, the United States District Court for the District of New Jersey) for purposes of seeking injunctive or other equitable relief.
11.4 Jury Trial Waiver. EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
11.5 Attorneys’ Fees. The prevailing Party in any arbitration or litigation arising out of this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs.
12. GENERAL PROVISIONS
12.1 Amendment & Waiver. No amendment or waiver of any provision is effective unless in writing and signed by authorized representatives of both Parties. A waiver is effective only for the specific instance and purpose for which given.
12.2 Assignment. Recipient may not assign or transfer this Agreement or any rights or obligations hereunder, whether by operation of law or otherwise, without Discloser’s prior written consent. Any attempted assignment in violation of the foregoing is null and void.
12.3 Successors & Assigns. This Agreement is binding upon and inures to the benefit of the Parties and their respective permitted successors and assigns.
12.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions remain in full force and effect, and the invalid provision will be deemed modified to the minimum extent necessary to make it valid and enforceable.
12.5 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior or contemporaneous understandings, proposals, or communications, whether written or oral.
12.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which constitutes an original, and all of which together constitute one instrument. Signatures delivered by facsimile, PDF, or authenticated electronic signature (e.g., DocuSign) have the same legal effect as originals.
13. EXECUTION
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.
| DISCLOSER | RECIPIENT |
|---|---|
| [DISCLOSING PARTY NAME] | [RECEIVING PARTY NAME] |
| By: _________ | By: _________ |
| Name: [NAME] | Name: [NAME] |
| Title: [TITLE] | Title: [TITLE] |
| Date: _______ | Date: _______ |
[// GUIDANCE: Notarization is generally not required for trade secret agreements in NJ but may be added for evidentiary purposes if desired.]
© [YEAR] – Prepared for professional legal use. Further customization may be required to address industry-specific regulations, data privacy laws, and cross-border disclosures.