A Proprietary Information clause establishes that any confidential or sensitive information shared between parties during the course of their relationship may not be disclosed to third parties without authorization. It ensures that proprietary data, such as trade secrets or business strategies, is protected from unauthorized use or distribution.
Proprietary Information. As used in this Agreement, the term “Proprietary Information” shall mean all trade secrets or confidential or proprietary information designated as such in writing by the Disclosing Party, whether by letter or by the use of an appropriate proprietary stamp or legend, prior to or at the time any such trade secret or confidential or proprietary information is disclosed by the Disclosing Party to the Recipient. Notwithstanding the foregoing, information which is orally or visually disclosed to the Recipient by the Disclosing Party, or is disclosed in writing without an appropriate letter, proprietary stamp or legend, shall constitute Proprietary Information if (i) it would be apparent to a reasonable person, familiar with the Disclosing Party’s business and the industry in which it operates, that such information is of a confidential or proprietary nature the maintenance of which is important to the Disclosing Party or if (ii) the Disclosing Party, within 30 days after such disclosure, delivers to the Recipient a written document or documents describing such Proprietary Information and referencing the place and date of such oral, visual or written disclosure and the names of the Representatives of the Recipient to whom such disclosure was made. In addition, the term “Proprietary Information” shall be deemed to include: (a) any notes, analyses, compilations, studies, interpretations, memoranda or other documents prepared by the Recipient or its Representatives which contain, reflect or are based upon, in whole or in part, any Proprietary Information furnished to the Recipient or its Representatives pursuant hereto; and (b) the existence or status of, and any information concerning, the discussions between the parties concerning the possible establishment of a business relationship.
Scope of Agreement. This Agreement shall apply to all Proprietary Information disclosed between the parties hereto from the Effective Date until December 31, 2020. Either party may terminate this Agreement at any time upon thirty (30) days’ written notice to the other party.
Use and Disclosure of Proprietary Information. The Recipient and its Representatives shall use the Proprietary Information of the Disclosing Party only for the Purposes and such Proprietary Information shall not be used for any other purpose without the prior written consent of the Disclosing Party. The Recipient and its Representatives shall hold in confidence, and shall not disclose any Proprietary Information of the Disclosing Party; provided, however, that (i) the Recipient may make any disclosure of such information to which the Disclosing Party gives its prior written consent; and (ii) any of the Proprietary Information may be disclosed by the Recipient to its Representatives who need to know such information in connection with the Purposes and who are informed of the confidential nature of such information and of the terms of this Agreement and who are bound to maintain the confidentiality of such information. In any event, the Recipient shall be responsible for any breach of this Agreement by any of its Representatives, and agrees, at its sole expense, to take reasonable measures to restrain its Representatives from prohibited or unauthorized disclosure or use of the Proprietary Information. Notwithstanding anything contained in this Agreement to the contrary, this Agreement shall not prohibit the Recipient from disclosing Proprietary Information of the Disclosing Party to the extent required in order for the Recipient to comply with a valid order of a court or other governmental body having jurisdiction or applicable laws and regulations, provided that the Recipient provides, when practicable, reasonable prior written notice of such required disclosure to the Disclosing Party and, at the Disclosing Party’s request and expense, makes a reasonable effort to assist the Disclosing Party’s reasonable and lawful actions to avoid and/or minimize the extent of such disclosure. Notwithstanding anything to the contrary herein, nothing in this Agreement shall prohibit Tetraphase from providing any information to AcelRx Pharmaceuticals, Inc. (“AcelR:x”) under Sections 4.4, 5.2(b) and 5.2(c) or otherwise complying with its obligations under Sections 4.4, 5.2(b) and 5.2(c) of that certain Agreement and Plan of Merger, dated March 15, 2020, among AcelRx, Consolidation Merger Sub, Inc. and Tetraphase.
Limitation on Obligations. The obligations of the Recipient specified in Section 4 shall not apply, and the Recipient shall have no further obligations, with respect to any Proprietary Information to the extent that such Proprietary Information: (a) is generally known to the public at the time of disclosure or becomes generally known without the Recipient or its Representatives violating this Agreement; (b) is in the Recipient’s possession at the time of disclosure; (c) becomes known to the Recipient through disclosure by sources other than the Disclosing Party without such sources violating any confidentiality obligations to the Disclosing Party that are known to the Recipient; or (d) is independently developed by the Recipient without reference to or reliance upon the Disclosing Party’s Proprietary Information.
Return of Proprietary Information. The Recipient shall, upon the written request of the Disclosing Party, return to the Disclosing Party or destroy all Proprietary Information received by the Recipient or its Representatives from the Disclosing Party (and all copies and reproductions thereof). In addition, the Recipient shall destroy: (i) any notes, reports or other documents prepared by the Recipient which contain Proprietary Information of the Disclosing Party, and (ii) any Proprietary Information of the Disclosing Party (and all copies and reproductions thereof) which is in electronic form or cannot otherwise be returned to the Disclosing Party. Notwithstanding the foregoing, the Recipient and each of its Representatives shall be permitted to retain (a) one copy of the Disclosing Party’s Proprietary Information for legal purposes or to determine compliance with the obligations of this Agreement and (b) any Proprietary Information that is located on backup tapes or archival systems that are not commonly accessible or that require Recipient or its Representatives to erase or delete information using special programs or techniques, in each case, subject to its obligations of confidentiality with respect thereto under this Agreement. Notwithstanding the return or destruction of the Proprietary Information, the Recipient and its Representatives will continue to be bound by their obligations of confidentiality and other obligations hereunder.
ALL PROPRIETARY INFORMATION IS PROVIDED “AS IS.” NEITHER PARTY MAKES ANY WARRANTIES, EXPRESS, IMPLIED OR OTHERWISE, REGARDING THE ACCURACY, COMPLETENESS OR PERFORMANCE OF ANY PROPRIETARY INFORMATION, OR WITH RESPECT TO NON-INFRINGEMENT OR OTHER VIOLATION OF ANY INTELLECTUAL PROPERTY RIGHTS OF A THIRD PARTY OR OF RECIPIENT.
“Proprietary Information” shall mean the “Trade Secrets” and “Confidential Information” of CREATION and COMPANY, respectively, as well as, when applicable, third-party information that has been entrusted on a confidential basis to the Disclosing Party, and is disclosed, either heretofore or hereafter, to the Receiving Party in connection with the Purpose. The term “Proprietary Information” does not include any information that was already known to the Receiving Party, without restriction as to further disclosure or use, prior to and at the time of its disclosure hereunder, provided such prior knowledge can be shown by the written records of the Receiving Party, or which, at the relevant time: (i) has entered the public domain by lawful means and through no act or omission or fault of the Receiving Party, or that was in the public domain at the time of disclosure to the Receiving Party; (ii) has been disclosed to the Receiving Party by a third party, without restriction as to further disclosure or use, and, at the time of such disclosure, such third party was not known by the Receiving Party to be under any obligation of confidence to the Disclosing Party; or (iii) has been separately and independently developed by Representatives or Affiliates of the Receiving Party without any reliance upon or reference to the Disclosing Party’s Proprietary Information and such separate and independent development can be shown by the written records of the Receiving Party.
Proprietary Information of the Disclosing Party will be used solely and exclusively by the Receiving Party for the Purpose stated above and will be so used on a strict need to know basis only. Neither Party shall use the Proprietary Information of the other Party in any other way or manner. The Parties recognize that the Proprietary Information is confidential and proprietary. Each Party acknowledges and agrees that the disclosure or unauthorized use by Receiving Party of the Proprietary Information of the Disclosing Party will injure such Disclosing Party. Therefore, the Parties agree that (other than as explicitly provided herein) they will not, at any time, use, reveal or divulge any Proprietary Information concerning a Disclosing Party.
The Parties, each in its capacity as the Receiving Party hereunder, may disclose any or all of the Proprietary Information of the other Party to such Receiving Party’s Representatives, provided that each Representative to whom Proprietary Information is disclosed must be expressly bound to obligations of non-disclosure and non-use consistent with the terms hereof, and that the Receiving Party shall inform its Representatives of the confidential nature of the Proprietary Information. The Parties agree to be responsible for any use or disclosure of Proprietary Information by said Representatives, which, if done directly by the Receiving Party, would constitute a breach of this Agreement.
All intellectual property and other rights in the Proprietary Information, whether in the nature of copyright, trademarks, trade secrets, or patent rights (whether registrable or not), or otherwise are to be and remain the property of the Disclosing Party absolutely. Each Party undertakes that neither it nor its Representatives will use, reproduce, modify, adapt, or make any other use of a Disclosing Party’s intellectual property or other rights in the Proprietary Information without the prior written consent of such Disclosing Party or in any manner infringe upon the rights of a Disclosing Party therein. The Receiving Party will not file any patent application, utility model application, or design application using or disclosing any of the Disclosing Party’s Proprietary Information.
The Receiving Party will use the same degree of care as it uses to protect its own Proprietary Information of like importance, but no less than a reasonable degree of care, to prevent the unauthorized use or disclosure of the Proprietary Information. Upon discovery of any misuse or disclosure of Proprietary Information, the Receiving Party will notify the Disclosing Party and will act to prevent any further misuse or disclosure.
Employment, Proprietary Information, and Invention Assignment Agreement. As a condition of accepting this offer of employment, you will be required to complete, sign and return SailPoint Employment, Proprietary Information, and Invention Assignment Agreement.
Proprietary Information shall not be reproduced in any form except as required to accomplish the Authorized Purpose. All Proprietary Information shall remain at all times the property of the Disclosing Party, and, upon the Disclosing Party’s written request, shall be destroyed; provided, however, that the Receiving Party may retain one copy of such Proprietary Information for archival purposes only; provided, further, Proprietary Information contained in system-backup media, such as email backup tapes, need not be destroyed so long as the backup media are maintained in confidence and are not readily accessible to users. All retained Proprietary Information shall remain subject to the terms and conditions of this Agreement.
The term “Proprietary Information” shall not include information which the Receiving Party can demonstrate by competent evidence: (a) is now, or hereafter becomes, through no act or failure to act on the part of the Receiving Party in breach of this Agreement, generally known or available; (b) is rightfully known by the Receiving Party at the time of receiving such information; (c) is hereafter furnished to the Receiving Party by a third party (that is not a Representative of the Disclosing Party), as a matter of right and without restriction on disclosure; or (d) is independently developed by the Receiving Party without any breach of this Agreement.
The Receiving Party shall maintain all Proprietary Information of the Disclosing Party in confidence and other than as expressly permitted herein shall not disclose any Proprietary Information of the Disclosing Party to any third party. The Receiving Party may use Proprietary Information of the Disclosing Party solely to evaluate the Receiving Party’s interest in pursuing a Potential Transaction (the “Authorized Purpose”), and for no other purpose. The Receiving Party shall not use Proprietary Information of the Disclosing Party for any purpose or in any manner that would constitute a violation of any laws or regulations, including, without limitation, any applicable export control laws. The Receiving Party shall only permit access to Proprietary Information of the Disclosing Party to those of its or its Affiliate’s employees, directors, officers, consultants, agents, financial advisors, investment bankers, attorneys and accountants, who (a) have a need to know such information for the Authorized Purpose, (b) have been advised by the Receiving Party of the Receiving Party’s obligations under this Agreement, and (c) are contractually or legally bound by obligations of non-disclosure and restricted use at least as stringent as those contained herein (“Representatives”). The failure of any Representative of the Receiving Party to comply with the terms and conditions of this Agreement shall be considered a breach of this Agreement by the Receiving Party. The Receiving Party shall immediately notify the Disclosing Party in the event of any loss, unauthorized disclosure or unauthorized use of, or any inability to account for, any Proprietary Information.
Proprietary information, also known as confidential information or trade secrets, refers to information that a company seeks to keep private because it provides a competitive advantage. This can include formulas, processes, designs, or any other intellectual property that is not public knowledge and is crucial to a business’s success.
Examples of proprietary information include:
- The Coca-Cola formula
- Google’s search algorithm
- A company’s marketing strategy
- Unpublished financial data
Proprietary information should be used when:
When writing proprietary information, consider these guidelines:
Contracts that typically contain clauses about proprietary information include:
In these agreements, it’s crucial to clearly define what constitutes proprietary information and the obligations of each party concerning its protection and use.
Dive deeper into the world of clauses and learn more about these other clauses that are used in real contracts.
A proprietary property clause in a contract defines the ownership rights and interests associated with proprietary or intellectual property created or used during the course of a contractual relationship. It typically stipulates the conditions under which one party retains or transfers ownership, ensuring protection and proper attribution of proprietary assets or content.
The Proprietary Rights clause in a contract typically outlines the ownership and control of intellectual property or confidential information exchanged or developed during the term of an agreement. It ensures that any proprietary information remains the property of its original owner and may establish how this information can be used, shared, or protected throughout and after the contract's duration.
A proprietary clause in a contract is designed to protect the ownership rights of specific information, materials, or technology belonging to a party involved in the agreement. It ensures that the proprietary information remains confidential and is not used, shared, or disclosed without explicit permission from the owner.
Try our AI contract analysis and extract important clauses and information from existing contracts.
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