Specifies whether confidential information must be labeled or marked as such, and what happens with unmarked disclosures.
⚠ Medium Risk
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Plain English Explanation
A marking requirements clause establishes whether confidential information needs to be clearly labeled (such as "CONFIDENTIAL" or "PROPRIETARY") to receive protection under the NDA. Some agreements require all written materials to be marked, while others protect information based on its nature regardless of labels.
There are three common approaches:
Strict marking required: Only information clearly marked as confidential receives protection. Unmarked materials are not covered.
Catch-up provision: Information disclosed without marking must be identified as confidential in writing within a specified period (e.g., 30 days).
No marking required: All information that is reasonably understood to be confidential based on its nature or circumstances is protected, regardless of marking.
For oral disclosures, most agreements require the discloser to identify the information as confidential at the time of disclosure and follow up with a written summary within a specified timeframe.
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Why This Clause Matters
Clarity of Obligations: Marking requirements remove ambiguity about what's protected, making it easier for recipients to know how to handle specific materials.
Administrative Burden: Strict marking requirements can be operationally difficult - in fast-moving discussions, people often forget to label documents properly.
Protection Gaps: If marking is strictly required and you forget to label something, that information may have no protection at all under the NDA.
Oral Disclosures: Information shared in meetings and calls is particularly vulnerable if strict marking/confirmation requirements exist.
Evidence in Disputes: Clear marking creates a paper trail that's valuable if you ever need to enforce the NDA or prove what was covered.
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Risk Factors
Timing of Written Follow-up: For oral disclosures, how many days do you have to send written confirmation? Shorter periods increase risk of losing protection.
What Counts as Marking: Does the marking have to be specific ("CONFIDENTIAL - ACME CORP") or is any indication of sensitivity sufficient?
Remediation Options: If you discover unmarked confidential materials were shared, can you retroactively designate them as confidential?
Practical Compliance: Consider whether your organization can realistically comply with marking requirements across emails, documents, presentations, and verbal discussions.
Inherently Confidential Information: Some information (like trade secrets or personal data) should arguably be protected regardless of marking - does the clause account for this?
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Clause Versions
Marking and Identification of Confidential Information
(a) Written or Electronic Disclosures. Confidential Information disclosed in written or electronic form should be marked with an appropriate legend such as "Confidential," "Proprietary," or similar designation. However, the absence of such marking shall not affect the confidential status of information that a reasonable person would understand to be confidential based on its nature or the circumstances of disclosure.
(b) Oral Disclosures. Confidential Information disclosed orally or visually shall be identified as confidential at the time of disclosure. Within ten (10) business days following such disclosure, the Disclosing Party should provide the Receiving Party with a written summary identifying the confidential nature of the information disclosed; provided, however, that failure to provide such summary shall not affect the confidential status of information that was clearly identified as confidential at the time of oral disclosure.
(c) Inherently Confidential Information. Notwithstanding the foregoing, the following categories of information shall be deemed Confidential Information without any marking or identification requirement: trade secrets, non-public financial information, personal data, and proprietary source code or algorithms.
(d) Good Faith Designation. Each party agrees to use good faith efforts to mark or identify Confidential Information disclosed hereunder.
Note: This balanced version encourages marking but doesn't strictly require it, recognizes practical realities of oral disclosures, and automatically protects inherently sensitive categories.
Identification of Confidential Information
Confidential Information shall be protected under this Agreement regardless of whether it is marked, labeled, or otherwise identified as confidential, provided that such information:
(a) Is disclosed in connection with the Purpose stated herein;
(b) Would reasonably be understood to be confidential or proprietary based on its content, nature, or the circumstances of disclosure; or
(c) Is of a type that the disclosing party customarily treats as confidential.
The Disclosing Party may, but is not required to, mark written materials as "Confidential" or with similar designations. The absence of such marking shall not affect the confidential status of the information.
For oral disclosures, the Disclosing Party may, but is not required to, identify information as confidential at the time of disclosure or provide subsequent written confirmation. The Receiving Party acknowledges that information shared during discussions related to the Purpose may be confidential regardless of whether it is explicitly identified as such.
The parties agree that in their working relationship, formal marking procedures may not always be practical, and both parties will treat non-public business information shared in the context of the relationship as confidential.
Why this favors you: No marking or identification requirements whatsoever. Protection is based on the nature of information and context of disclosure. Places burden on receiver to treat business information as confidential.
Mandatory Marking and Identification Requirements
(a) Written Disclosures. Confidential Information disclosed in written, electronic, or other tangible form shall be conspicuously and specifically marked with the legend "CONFIDENTIAL - [DISCLOSING PARTY NAME]" or substantially similar wording on each page or screen. Documents not so marked shall not be considered Confidential Information under this Agreement.
(b) Oral and Visual Disclosures. Any Confidential Information disclosed orally or through visual presentations must be:
(i) Expressly identified as "Confidential Information of [Disclosing Party]" prior to or immediately upon such disclosure; AND
(ii) Summarized in a written memorandum delivered to the Receiving Party within five (5) business days of the oral or visual disclosure.
Oral or visual disclosures that are not confirmed in writing within the specified period shall not be protected as Confidential Information.
(c) Specificity Requirement. Written summaries of oral disclosures must describe the confidential information with sufficient specificity to enable the Receiving Party to identify the exact scope of its confidentiality obligations. General descriptions or categorical references shall not be sufficient.
(d) No Retroactive Designation. Information that was disclosed without proper marking or identification cannot be retroactively designated as Confidential Information.
(e) Burden of Proof. In any dispute regarding whether information qualifies as Confidential Information, the Disclosing Party shall bear the burden of proving that all marking and identification requirements were satisfied.
Warning - Strict requirements: Mandatory marking on every page, very short 5-day window for oral confirmations, no retroactive designation allowed, specificity requirements, and discloser bears burden of proof. Creates significant risk of losing protection due to administrative failures.
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Negotiation Tips
1
Extend Oral Disclosure Windows: If the agreement requires written confirmation of oral disclosures, negotiate for at least 10-15 business days rather than 5. Fast deadlines are easy to miss.
2
Add "Reasonably Understood" Language: Ensure the clause includes a fallback that information reasonably understood to be confidential is protected, even without marking.
3
Carve Out Core Categories: Negotiate for automatic protection of certain categories (trade secrets, financials, source code) without marking requirements.
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Allow Retroactive Designation: Push for the ability to designate previously disclosed unmarked information as confidential within a reasonable cure period.
5
Consider Your Processes: Before agreeing to marking requirements, check whether your team realistically can and will comply. Training and tools may be needed.
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Batch Oral Summaries: If possible, negotiate the ability to send periodic summary letters covering all oral disclosures during a period, rather than individual confirmations.