Cannabis businesses use non-disclosure agreements (NDAs) constantly. This may be due to a series of factors, or some combination thereof: 1) the relative hardship of acquiring and protecting intellectual property over marijuana-related processes and products, today and historically; 2) a general modus operandi of “close to the vest” dealings in an industry that historically was pushed underground; and 3) the fact that most cannabis businesses are small businesses that have not taken the steps to formally register (registrable) intellectual property.
But none of that is any excuse for having a terrible NDA, or, more specifically, one terrible clause in your otherwise satisfactory cannabis NDA. Here is the problem clause:
Recipient’s obligations under this Agreement with respect to the Confidential Information will survive for a period of two years.
[Or, “three” or “five” or even “ten” years.]That’s it. That’s the whole problem, which, if drafted by an attorney on behalf of a client attempting to protect a trade secret may rise to the level of malpractice. Why? Because trade secrets derive their protection from proof that the owner has taken reasonable efforts to safeguard the secret information. Once they are out, they are out. You can’t un-ring a bell.
The
Read full article on HarrisBricken
