Why Trade Secrets Aren't Covered in oneNDA: A Practical Perspective

Trade secrets are among the most valuable assets a company can possess, often giving businesses a competitive edge. However, when it comes to using oneNDA, you might notice that trade secrets aren't specifically addressed in the standard template. This omission is not accidental—there are practical reasons behind this decision, which align with the overall philosophy of oneNDA.

Understanding Trade Secrets

Trade secrets include formulas, practices, designs, instruments, patterns, or any information that provides a business with an advantage over competitors who do not know or use it. Unlike patents, trade secrets are not publicly disclosed and must be kept confidential to maintain their value.

Why oneNDA Doesn’t Cover Trade Secrets

The creators of oneNDA have taken a streamlined approach, aiming to create a universally applicable, simple, and balanced NDA. Including clauses specifically for trade secrets would complicate the template, potentially leading to the very issues oneNDA seeks to avoid: lengthy negotiations and inconsistent applications across different agreements.

Here’s why trade secrets are excluded:

1. Complexity and Specificity: Trade secrets often require detailed, specific clauses that define the scope of the secret, the duration of confidentiality, and the legal remedies in case of a breach. Including such clauses would undermine the simplicity and universality of oneNDA.
2. Risk of Overloading the NDA: The more specific the NDA becomes, the less likely it is to be universally applicable. oneNDA’s strength lies in its simplicity—covering only the most essential elements of confidentiality without delving into the complexities of protecting trade secrets.
3. Low Litigation Rates for NDAs: Statistically, NDAs are rarely litigated. Since the likelihood of enforcing specific trade secret protections through litigation is low, the creators of oneNDA decided that the benefits of simplicity outweigh the risks associated with excluding trade secrets.
4. Encouraging Best Practices: By not including trade secrets, oneNDA encourages businesses to handle these crucial assets through other, more appropriate legal instruments, such as tailored agreements or enhanced contractual protections that address the unique nature of trade secrets.

How to Protect Trade Secrets

If your business deals with trade secrets, it’s advisable to use a more detailed, customised NDA or a separate trade secret agreement. These agreements should be drafted with the help of legal counsel to ensure that they provide the necessary protections, including clear definitions, obligations, and consequences for breaches.

In summary, while oneNDA is an excellent tool for standard commercial confidentiality, its exclusion of trade secrets is a deliberate choice aimed at maintaining simplicity and broad applicability. For businesses needing to protect trade secrets, a more specific legal framework is recommended.

For more details on the rationale behind the exclusions in oneNDA, you can explore the Graveyard Document provided by the oneNDA community, which outlines the clauses considered and excluded during the drafting process.