This form is a "Residuals" Clause for Basic Nondisclosure Agreement usable in agreements regarding nondisclosure of licensing, patents, or commercial trade secrets. The residuals clause allows some disclosures of confidential information under certain limited circumstances.
The North Dakota Residuals Clause for Basic Nondisclosure Agreement is a critical component of protecting sensitive information and trade secrets from being unlawfully disclosed or misused. This clause outlines the specific provisions regarding the treatment of residual information, i.e., any information that remains embedded in employees' memories or experiences after their involvement with the disclosing party's confidential information. In North Dakota, there are mainly two types of Residuals Clauses used in Basic Nondisclosure Agreements: the comprehensive residuals clause and the limited residuals' clause. 1. Comprehensive Residuals Clause: This clause covers all types of residual information obtained by the receiving party during the course of their involvement with the disclosing party's confidential information. The comprehensive clause prohibits the receiving party from using or disclosing any residual information, regardless of whether it was developed solely by the receiving party or in combination with other non-confidential information. It offers maximum protection to the disclosing party. 2. Limited Residuals Clause: This clause is more moderate in nature and specifies the limited use and disclosure of residual information. It typically allows the receiving party to use and disclose residual information only if they can demonstrate that it was acquired independently or is generally known in the industry. The limited residuals' clause is often used when the disclosing party understands that certain residual information is unavoidable in the recipient's ongoing business operations. Regardless of the type of residuals clause used in a Basic Nondisclosure Agreement in North Dakota, it is crucial for both the disclosing and receiving parties to fully understand its implications and obligations. By including a residuals' clause, parties can establish a clear framework for handling and safeguarding residual information, ensuring that confidential information is protected even after the agreement's termination.
