Negotiation Objectives
Duration is one of the most commonly negotiated NDA terms. The disclosing party wants maximum protection, while the receiving party wants certainty about when obligations end.
If You Are the Disclosing Party
You want the longest duration the receiving party will accept, with perpetual protection for trade secrets. Push for the confidentiality period to run from each disclosure date (not the agreement date) so later disclosures get full protection.
If You Are the Receiving Party
You want a defined, reasonable term with a clear end date. Avoid perpetual obligations. Push to have the confidentiality period run from the agreement termination date so all obligations end at the same time, simplifying compliance.
Industry Standards
Appropriate term lengths vary significantly by industry and information type. Use this table as a starting point for negotiations.
| Industry / Information Type | Typical Duration | Notes |
|---|---|---|
| Technology / Software | 2-3 years | Rapid innovation makes long terms less relevant; source code may warrant longer protection |
| Pharmaceuticals / Biotech | 5-10 years | Long R&D cycles and patent considerations justify extended protection |
| Manufacturing / Trade Secrets | 5-7 years or perpetual for trade secrets | Process know-how and formulas may retain value indefinitely |
| Financial Services | 3-5 years | Customer data and trading strategies; regulatory considerations may apply |
| M&A Due Diligence | 2-3 years | Transaction-specific; often includes standstill provisions |
| Marketing / Business Planning | 1-2 years | Information becomes stale quickly; shorter terms are appropriate |
| Employment / Consultant NDAs | 2-5 years post-termination | Courts scrutinize long post-employment restrictions |
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Preliminary Discussions
If you are exploring a potential relationship but not yet sharing truly sensitive information, a 1-year term is reasonable. You can always execute a more comprehensive NDA later if the relationship progresses.
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Fast-Moving Industries
In technology, media, and other rapidly evolving sectors, information becomes outdated quickly. A marketing strategy or product roadmap from three years ago has little competitive value today.
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Routine Business Information
Pricing lists, vendor information, and operational details rarely warrant multi-year protection. Push back on long terms for information that is not truly sensitive.
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Administrative Burden
If your organization will receive information from many sources, tracking perpetual obligations becomes impractical. Standardize on reasonable terms to manage compliance.
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Trade Secrets and Core IP
Genuine trade secrets - formulas, algorithms, manufacturing processes - may warrant perpetual protection or at least "as long as it remains a trade secret" language. This is the strongest argument for longer terms.
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Long Development Cycles
Pharmaceuticals, aerospace, and infrastructure projects have multi-year development timelines. A 2-year confidentiality period might expire before your product even launches.
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Significant Investment
When you are sharing information that required substantial R&D investment, longer protection is justified. The receiving party's inconvenience is outweighed by your legitimate interest in recouping that investment.
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Competitive Sensitivity
If disclosure to a competitor would cause significant harm, push for a term that exceeds the likely period of competitive sensitivity.
Perpetual NDAs: Handle with Care
⚠ Courts Are Skeptical
Perpetual confidentiality obligations are increasingly viewed as unreasonable restraints. Several high-profile cases (including the infamous Stormy Daniels NDA) have highlighted how courts may refuse to enforce overbroad perpetual terms. If you must use perpetual language, limit it to information that truly qualifies as a trade secret.
Tiered Duration: A Practical Compromise
Consider a tiered approach that provides different durations for different types of information. For example: 2 years for general business information, 5 years for technical specifications, and perpetual (as long as it qualifies) for trade secrets. This shows reasonableness while still protecting your most sensitive information.
Alternative: Trade Secret Carve-Out
Instead of making the entire NDA perpetual, use a standard 3-5 year term with a carve-out stating that information qualifying as a trade secret remains protected "for so long as such information constitutes a trade secret under applicable law." This ties protection to the information's legal status rather than an arbitrary timeframe.
Negotiation Tips
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1
Clarify the trigger date. Does the confidentiality period run from the agreement date, from each disclosure, or from termination? "Three years from disclosure" means later disclosures get less protection. "Three years from termination" means all obligations end together.
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2
Distinguish disclosure period from confidentiality period. The disclosure period is how long parties can share information. The confidentiality period is how long the recipient must keep it confidential. These can and often should be different.
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3
Include termination rights. Both parties should be able to terminate the disclosure period with reasonable notice (30 days is typical). This does not end confidentiality obligations for already-disclosed information.
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4
Consider renewal provisions. For ongoing relationships, a 2-year term that auto-renews may be preferable to a 10-year term. This allows periodic renegotiation as circumstances change.
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5
Match term to the relationship. A preliminary discussion NDA should be short. An NDA for a major joint development project should be longer. Do not use a one-size-fits-all approach.
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6
Document the rationale. If you need a longer-than-typical term, be prepared to explain why. Courts are more likely to enforce terms that are clearly tied to legitimate business needs.