More unintended consequences of use restrictions in confidentiality agreements

Purpose – The purpose of this paper is to highlight the importance of careful review and negotiation of confidentiality agreements in corporate transactions and to discuss certain issues that arose out of a recent confidentiality agreement. Design/methodology/approach – The paper explores the factual background of the dispute and analyzes the court's decision. Findings – This court decision and the recent decision of the Delaware Chancery Court in Martin Marietta Materials, Inc. v. Vulcan Materials Company highlight the importance of careful attention to the use restrictions when negotiating confidentiality agreements in corporate transactions. Practical implications – The decision highlights the need for careful negotiation and consideration of the terms of confidentiality agreements in the context of corporate transactions, especially use restrictions and exceptions thereto. Originality/value – The paper provides guidance by lawyers experienced in the negotiation of standstill and use provisions in confidentiality agreements.