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CS Professional · Intellectual Property Rights - Law and Practice · Protection of Trade Secrets

Anita Foods Ltd signs an NDA with a consultant covering its recipe formulations. The NDA states that the confidentiality obligation lasts for 3 years from disclosure. In year 5, the consultant uses a recipe that has never become public. What is the best analysis?

The contractual obligation under the NDA has expired after 3 years, so a contract claim fails, although an equitable breach of confidence claim may still be argued because the recipe remains secret. Good drafting ties trade secret confidentiality to the information remaining secret rather than a fixed period.

  1. AThe consultant is bound forever because trade secrets never lose protection
  2. BThe contractual obligation has expired, so the NDA cannot be enforced, though equitable duties may still be arguedCorrect
  3. CThe consultant is liable because the NDA automatically renews every 3 years
  4. DThe recipe becomes public property once the NDA period ends

Explanation

An NDA is enforceable for the term it specifies, so the contractual claim lapsed after 3 years. An equitable breach of confidence argument may still be raised because the recipe remains secret, though it is weaker. Trade secret protection is not automatically perpetual, and NDAs do not auto-renew unless stated.

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