Wisconsin NDA Template
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A Wisconsin NDA, or “nondisclosure agreement,” serves as a legal agreement involving two or more parties that outlines the information that must be kept under wraps by you or the other involved parties. Used by budding startups and established businesses alike, NDAs serve as an insurance policy to proactively prevent scenarios where employees or potential business partners might share the company's confidential information. Providing an extra layer of defense, they safeguard your company's trade secrets and other valuable details. This could include your business strategies or customer contact database, ensuring they're kept safe from public disclosure or landing into the hands of competitors.
Trade Secret Definition in Wisconsin
“Trade secret” means information, including a formula, pattern, compilation, program, device, method, technique or process to which all of the following apply:
1. The information 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.
2. The information is the subject of efforts to maintain its secrecy that are reasonable under the circumstances. (Wisconsin Uniform trade secrets act 134.90(1)(c))
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Read on to learn more about Wisconsin NDAs, including:
What's included in a Wisconsin NDA?
Here are some key components that are typically included in a Wisconsin Nondisclosure Agreement:
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Disclosing and Receiving Party
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Definition of Confidential Information
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NDA Purpose
- Use of Confidential Information
- Limited Access to Confidential Information
- Exclusions - What's not Covered
- Term of Confidentiality Period
1. Disclosing and Receiving Party
When it comes to NDAs, we're dealing with two main participants. The "disclosing party" is the one letting out the prized confidential information. The "receiving party", as the term suggests, is on the receiving end of this information. This term setup isn't true for mutual NDAs, where both parties are technically the dispensers and recipients of data.
Also, remember there's a subtle difference between "Company Name" and "individual". If you're a single person either sharing or getting access to the intel, use your personal name, especially when you don't own or represent a company.
This nondisclosure agreement (this “Agreement”) is dated [Date] (the “Effective Date”) and is between [Company Name of Disclosing Party; e.g. “Max Studios, LLC”; if you do not have a formal legal entity, use your legal name, e.g. “Max Smith”], (the “Company”), and [Company Name of Receiving Party; if receiving party does not have a formal legal entity, use their legal name] (the “Recipient”).
2. Definition of Confidential Information
A key element in your NDA requires defining the coverage under "confidential information". Let's paint a hypothetical scenario where an employer declares, "Everything I share with you for the next 2 years is confidential." As an employee, you then share a casual, non-critical comment made by your employer with a mutual friend, would that be a breach? Absolutely not!
No court would affirm such a generic confidentiality clause. It's essential not to cast your net too broadly or too narrowly, as it can lead to accidental leakage of confidential information, which becomes free for distribution by the receiving party.
Most firms stick to a standard definition, like the one offered in our template. If you're unsure, don't hesitate to dive into our comprehensive post on defining confidential data in your NDA.
“Confidential Information” means any information that is proprietary or unique to the Company and that is disclosed by the Company to the Recipient during the term of this Agreement, including the following: trade secret information; matters of a technical nature such as processes, devices, techniques, data and formulas, research subjects and results; marketing methods; plans and strategies; information about operations, products, services, revenues, expenses, profits, sales, key personnel, customers, suppliers, and pricing policies; and any information concerning the marketing and other business affairs and methods of the Company which is not readily available to the public. “Confidential Information” also includes information of others that (1) is disclosed under this Agreement, (2) the Company is obligated to protect from disclosure or restricted from using or both, and (3) that would constitute “Confidential Information” if the information belonged to the Company.
3. NDA Purpose
Every NDA template, ours included, requires expressing the "purpose" of this agreement. It could be a specific goal like "producing a prototype product for the disclosing party". Or, it might be a broader intention like "evaluating possible business collaboration between both parties". The purpose signifies the intended use of the confidential information by the recipient.
Picture this, you're hiring a developer for your website, and you share your business model for better understanding. In this case, your NDA's purpose should align with the "development" of specific parts of your website. It avoids scenarios where the developer can utilize your business information to start a similar venture, leveraging your confidential details.
In most instances, the template language, focusing on the evaluation of collaborative business prospects, suffices.
“Purpose” means evaluating the parties’ capabilities in anticipation of pursuing one or more business opportunities.
4. Use of Confidential Information
The usage of your confidential details is intrinsically tied to the NDA's purpose. Basically, the agreement states you're only allowed to work with these details for the intent outlined. Someone might abuse these confidential details for personal gains, straying from the agreed-upon purposes. This clause secures private conversations and shields both parties from any potential exploitations or harm.
The Recipient shall use Confidential Information only for the Purpose. Unless otherwise agreed in writing, neither party shall disclose to a third party the fact that discussions or negotiations are taking place concerning the Purpose or any of the terms or other facts relating to the Purpose, including the status of negotiations between the parties.
5. Limited Access to Confidential Information
Often, you share information with a "Recipient", but what happens when the recipient is a company? Or when the recipient wants legal counsel on some of the shared details? The answer to these dilemmas lies in the "Limited Access" area of your NDA.
Generally, our template language should serve most cases well. However, consider who truly needs access to the details and restrict it to those personas only. In case the recipient divulges details to another party, it's essential to ensure this new recipient also signs an NDA in adherence to similar terms.
The Recipient shall protect the Confidential Information from unauthorized use and disclosure using the same degree of care that it uses with respect to its own information of like importance, but no less than a reasonable degree of care. The Recipient shall retain the Confidential Information in confidence and shall not disclose Confidential Information to any third party without the Company’s prior written consent. However, the Recipient may disclose the Confidential Information to employees, contractors, consultants, and authorized representatives of the Recipient who (1) require access to the information for the Purpose, (2) are informed by the Recipient of the Recipient’s obligations under this Agreement, and (3) are bound by contract or fiduciary duty to obligations of confidentiality and use restrictions with substantially similar function, purpose, scope, and effect to those of this Agreement and that are at least as protective of the Confidential Information as this Agreement.
6. Exclusions - What's not Covered
"Exclusions" is another section encountered in an NDA. They enhance the chances of a court upholding your NDA, if a dispute escalates to that extent. There are specific provisions like 4(a)(1) you might consider removing, especially if you've already divulged confidential details to the recipient. Otherwise, the current exclusions should cater to most situations.
(a) This Agreement imposes no obligations upon the Recipient with respect to Confidential Information that: (1) was known to the Recipient before disclosure by the Company as evidenced by contemporaneous records; (2) has become publicly available through no fault of the Recipient; (3) is disclosed to the Recipient by a third party that has the right to make the disclosure to the Recipient and that does not have any obligation of confidentiality with respect to the Confidential Information; or (4) is disclosed by the Recipient with the Company’s prior written consent.
(b) If the Recipient is required by any governmental agency, court, or other judicial or regulatory body to provide any Confidential Information received under this Agreement, then the Recipient will not be deemed to be in violation of this Agreement for the disclosure if the Recipient promptly gives written notice to the Company of the requirement to provide the Confidential Information and cooperates with the Company so that the Company may contest the requirement to provide the Confidential Information. The Recipient may disclose only that portion of the Confidential Information that it is legally required to furnish.
7. Term of Confidentiality Period
Every NDA must address the term—the duration of its validity. An NDA could cover a swift transaction spanning a few days or might be designed to stand the test of time, continuing indefinitely. Ideally, the duration should cover the prospective lifespan of your collaborative journey. But, often NDAs persist even when the specific business association has ended, especially to safeguard the secrecy of trade secrets.
You would typically want to include a clause that explicitly protects your trade secrets even after the end of the business relationship. If you're uncertain about the appropriate duration, understand that the average term generally lasts between one to five years. The bottom line is, the term should last as long as you require the data to stay confidential.
This Agreement will continue for a period of one year from the Effective Date unless: (1) terminated earlier by either party upon written notice to the other; (2) extended by the mutual written agreement of the parties; or (3) superseded by a subsequent written agreement that explicitly sets forth the obligations of the parties with respect to Confidential Information. With respect to business information, the Recipient’s obligations of confidentiality and non-use under this Agreement will expire three years from the termination of this Agreement. With respect to all information that constitutes a trade secret, the Recipient’s obligations of confidentiality and non-use under this Agreement will survive the termination of this Agreement for as long as such information remains a trade secret under applicable law.
What happens if I've already disclosed confidential information?
If you find yourself in a situation where you've previously shared confidential data with the other party, don't sweat it! We can walk you through the problem. You'd need to make a few adjustments to the template, and we will guide you through that.
How do I protect my trade secret?
NDAs exist for protecting your confidential data. But remember, for your data to hold innate value, it has to qualify as a 'trade secret'—a core part of your unique business recipe. If you're grappling with understanding what constitutes a trade secret or are unsure whether your data could be defined as one, we recommend reading our detailed guide on trade secrets and how to safeguard them efficiently.