What is ‘Confidential Treatment’ in the Context of a Required Disclosure Clause in a Non-Disclosure Agreement (NDA)?

Question from Stan, What is ‘Confidential Treatment’ in the Context of a Required Disclosure Clause in a Non-Disclosure Agreement (NDA)?

Answer from AI:

In the context of a Non-Disclosure Agreement (NDA), ‘confidential treatment’ refers to the process and measures taken to ensure that the confidential information being disclosed is protected and kept confidential, even when it is required to be disclosed by law.

Understanding Confidential Treatment

When a party to an NDA is required by law to disclose confidential information, they are often obligated to request ‘confidential treatment’ of that information. This means they must take steps to ensure that the information remains confidential to the greatest extent possible. This could involve:

• Notifying the other party of the legal requirement to disclose the information
• Requesting that the authority requiring the disclosure treats the information as confidential
• Limiting the amount of information disclosed to the minimum necessary to comply with the legal requirement

Legal Basis for Confidential Treatment

The legal basis for confidential treatment often comes from the NDA itself, which typically includes a clause requiring the recipient of confidential information to seek confidential treatment if they are required by law to disclose the information. This is often referred to as a ‘required disclosure’ clause.

When Legal Advice Might Be Necessary

If you are party to an NDA and are required by law to disclose confidential information, it is strongly recommended that you seek legal advice. A legal professional can guide you through the process of requesting confidential treatment and help ensure that you comply with both the legal requirement to disclose and your obligations under the NDA.

Relevant Laws and Regulations

The specific laws and regulations that apply to confidential treatment can vary depending on the jurisdiction and the nature of the information being disclosed. In the United States, for example, the Securities and Exchange Commission (SEC) has rules regarding confidential treatment requests for information included in certain filings.

Please note: This information is intended to provide a general understanding of ‘confidential treatment’ in the context of an NDA. It is not intended to provide legal advice. Always consult with a legal professional for personalized advice.