As you know, many contracts and declarations of intent contain the obligation to destroy documents when a business relationship ends. In recent years, it has become common to add to this obligation a phrase such as «and delete all computer files» or «destroy all electronic records.» Take a common scenario that involves disclosing a single document to one person. The party that has the information adds a document to an email and sends the email to an official of the party who receives authorized access under the confidentiality agreement. The transmission email clearly indicates that the document is confidential and is protected by the confidentiality agreement. The official stores the document on the recipient`s computer network (making sure to limit access to those who have authorized access to the document) and emails sent to other staff members of the recipient party who have a «need to know» as well as to the company`s lawyer and accountant, each of whom has access to the document as part of the confidentiality agreement. This type of sharing is probably exactly what the parties envisioned in negotiating the confidentiality agreement. Data is regularly backed up without us being aware of it. Of course, any computer scientist somewhere in every company probably knows what kind of data is stored on the company`s servers. But people who negotiate, sign and implement confidentiality agreements (and who are responsible for the return or destruction of confidential information) probably have no more than a rudimentary understanding of how data is transferred, stored and stored. And they probably don`t know who has access to it.
Confidentiality agreements often require the party that has an obligation to protect confidential information (the receiving party) to return the information at the end of the agreement or destroy it. Here`s a typical provision I borrowed from the Iowa State University website: Answer #1: We distribute confidentiality agreements (NDAs) like crazy in our fund, so I think we have a pretty good idea of market conditions. At this point, for most recipients of confidential information, the standard is to keep «a copy» in conjunction with their «standard document storage guidelines» that apply to all their counterparty relationships. Your question does not seem too aggressive. We get and give this in normal business.1 Consider these questions: (1) How many copies of the document are there now? (2) Where are the copies of the document? 3. Can all copies be rounded and destroyed if necessary as part of a confidentiality agreement? The answer (3) is probably «no,» and I think (1) and (2) are as easy to answer as «How many angels can dance on the head of a pin?» Whack A-Mole. Cockroaches. Electronic confidential information. What`s the common thread? They`re all hard to destroy.
Carnival moles show up relentlessly in new places. Cockroaches could survive a nuclear attack. And it would be difficult – perhaps impossible – to completely destroy electronic confidential information, as is necessary in many confidentiality agreements. Confidentiality agreements often require the receiving party to return or destroy confidential information at the end of the agreement, but can you hope to round up and destroy all copies of confidential electronic information? It may be possible, but I doubt it. Does this mean that most confidentiality agreements are, at least technically, violated? Most example clauses appear to be written for material materials and rarely address electronic media appropriately.