For how long will the recipient’s treatment of confidential information be governed by this contract?

The answers to this question allow you to specify that disclosure and use of Confidential Information will be covered by this agreement for as long as it remains Confidential Information or for a state period, or you can opt for a combination of both approaches.

If confidential information constitutes a trade secret, it would benefit the disclosing party not to have that information made public, ever, as opposed to saying that it can be disclosed after a stated period has elapsed. (That’s why the Uniform Trade Secrets Act protects information for as long as it remains a trade secret.)

Even if the recipient doesn’t itself disclose any information after a stated period, conceivably a nonparty could point to lapse of any obligation to keep information confidential as a defense to its own use of that information. See James Pooley, Trade Secrets § 8.02 (2010); see also Louis Altman & Malla Pollack, 2 Callmann on Unfair Competition, Trademarks and Monopolies § 14:6 (4th ed. 2010).

The obligation to keep trade secrets confidential could be described as “perpetual,” but the recipient might well be reluctant to be subject to a perpetual obligation. As a practical matter, breach of any such obligation with respect to a given trade secret would become meaningless once that trade secret ceases being confidential. Using that concept as a way to put a limit on the obligation would help make it more acceptable to the recipient, so that concept is incorporated in the questionnaire and the related contract language.

What about confidential information that doesn’t constitute a trade secret? Such information might include information that is valuable but doesn’t constitute a trade secret because the disclosing party has failed to safeguard it adequately. It might also include lists that contain public information but are nevertheless valuable because of the time and expense required to compile that information. See Linda K. Stevens, When Should a Confidentiality Agreement Contain a Time Limit?, Franchise L. J., Summer 1999. It might also include personally identifiable information (PII), unless in the “Defining Confidential Information” part of this questionnaire you indicated that PII would be governed by a separate contract.

Analogous to requiring that trade secrets be kept confidential until they are no longer constitute confidential information would be to require that any other confidential information be kept confidential until it no longer constitutes confidential information. But when it comes to confidential information that doesn’t constitute a trade secret, the recipient would likely be even less willing to subject itself to an open-ended obligation not to disclose such information. Furthermore, some courts have shown themselves unwilling to grant unlimited protection to information that doesn’t constitute a trade secret. See, e.g., Nalco Chemical Co. v. Hydro Technologies, Inc., 984 F.2d 801 (7th Cir. 1993). So imposing on a recipient an open-ended obligation not to disclose any confidential information, even if some of it doesn’t constitute a trade secret, increases the likelihood of a legal challenge.

An alternative would be to opt for a two-tier approach, with trade secrets being kept confidential until they no longer constitute confidential information and other confidential information being kept confidential for a stated period. Note that the answer that reflects that approach—the second answer—doesn’t use the phrase “trade secrets”; instead, it refers to “specified Confidential Information”; in the following question, the user is asked to specify what Confidential Information is to be covered for the longer period. This approach is used because the recipient isn’t in a position to distinguish what Confidential Information constitutes the disclosing party’s trade secrets. The only way to avoid confusion is to have the disclosing party indicate at the outset what Confidential Information is particularly sensitive and therefore entitled to be protected until it no longer constitutes Confidential Information.

If the confidential information contains PII and you opt to have some or all information no longer covered after a stated period, the disclosing party should make sure that the nondisclosure obligation lasts long enough not to risk exposing the disclosing party to liability under whatever statutory regime applies to that PII.