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Can a non-disclosure agreement specify that, after signing, any information disclosed or will be disclosed to any third party without permission is invalid, incorrect, and not factual, and this agreement overrules any other agreements?


Background: Alice and Bob signed a NDA regarding The Project. Without permission, Bob disclosed The Project to Alice's competitor Cindy. Cindy therefore initiated a lawsuit (for example, a patent trolling lawsuit) against Alice. Can Alice use the abovementioned clause to reaffirm that the information disclosed by Bob is not facts?

From my limited understanding, Alice can only punish Bob for breaching contract but she cannot protect herself from patent trolling suit with that NDA.

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    I don't follow this at all. What kind of information becomes false because someone discloses it?
    – bdb484
    Sep 22 '20 at 20:50
  • @bdb484 That kind of information exists only in IT, where it is encrypted in a special manner that destroys the ability to decrypt the file if opened or copied without the proper key - but the information it turns into is total bovine-excrement.
    – Trish
    Sep 22 '20 at 21:13
  • @Trish I can only think on quantum observables holding that property, not anything on IT. Could you expand how which current technology would do that?
    – Ángel
    Sep 23 '20 at 0:10
  • @bdb484 Clearly many information does not become false when disclosing it. The clause just make the parties take an oath that the information, if any being disclosed, must be wrong information.
    – dodo
    Sep 23 '20 at 3:50
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Against Bob: yes; Against Cindy: no

I'm going to borrow @Trish's example because it's a good one although the conclusions they reach are wrong.

Alice made a green box. Bob signs an NDA never to tell anyone that Alice made a green box, and there is a clause in it that if the NDA is breached, the box is red. Bob tells Cindy that Alice made a green box.

Cindy has a patent on making green boxes. Cindy sues Alice and in the lawsuit puts Bob on the stand.

Situation 1

So, the box is objectively green and objectively a breach of Cindy's patent on green boxes.

Bob is on the stand and is required to answer questions honestly and no contract can prevent him from doing so. He testifies that the box is green. This would be a breach of contract except that a clause that requires a breach of the law (perjury in this case) is void for public policy reasons so Bob cannot be sued for this. However, he can be sued for the initial breach - he may have a public policy defense here because Alice was breaking the law, however, it’s easy enough to construct a scenario where Alice was innocent but suffered loss from Bob’s disclosure.

Cindy can say what she likes because she is not bound by the NDA.

Cindy wins, Alice loses.

Situation 2

Cindy dies - after a long and happy life so we won't grieve too much. To Bob's surprise, he inherits Cindy's green box patent of which he was previously in complete ignorance of.

Bob sues Alice for breaching Cindy's now his, patent.

So, the box is objectively green and objectively a breach of Cindy's patent on green boxes.

However, Bob agreed with Alice in the contract that the box is red and so, legally for matters between Alice and Bob the box is legally red (notwithstanding that everyone knows it's green) and is not in breach of Bob's patent.

This sort of stuff has a name - a legal fiction. Adoption is a legal fiction - adoptive parents are (legally) parents; biological parents of adopted children are (legally) strangers.

Alice wins, Bob loses.

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Can Alice use the abovementioned clause to reaffirm that the information disclosed by Bob is not facts?

No. It will be pointless. Facts don't stop being facts just because someone discloses them in violation of some NDA.

If Bob discloses information which is privileged, though, in some scenarios Bob's disclosure(s) would not be allowed as [Cindy's] evidence against Alice. Such scenarios are premised on the existence of a special relation between Bob and Alice (attorney-client, physician-patient, and the like). By virtue of that relation (for instance, where Alice is the client and Bob is the attorney), only Alice is entitled to waive the privilege, provided that the information at issue (1) strictly pertains to that relation between Alice and Bob, and (2) its disclosure was indispensable in that relation. But that exceptional scenario does not imply that the fact-finder ought to conclude that those facts never happened. For instance, Cindy would still prevail if Bob's disclosure leads Cindy to other evidence of those facts.

You are right: Depending on the nature of the facts at issue (first and foremost, that those facts be lawful), Alice might have a claim against Bob for breach of the NDA. But this will not affect the actionability of Cindy's claim against Alice.

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Let's test your theory.

Alice made a green box. Bob is Alice's janitor and signs an NDA never to tell anyone that Alice made a green box, and there is a clause in it that if the NDA is breached, the box is claimed to be red. Bob tells Charly that Alice made a green box.

Charly has a patent on making green boxes. Charly sues Alice and in the lawsuit tells that bob told him. On the stand, the NDA gets pulled out, claiming that the box would be red, but also the box ends in evidence. The box still is, in fact, green.

While the NDA might try to claim such nonsense, it does not alter the facts. Facts are objective - but interpreting them is subjective. A contract can not alter facts. A box that is green stays green, no matter what the contract claims.

Alice only can sue Bob for breaking the NDA, but she can't enforce the 'my box is red' part.

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  • Facts are not necessarily objective - an agreed statement of facts is legally factual even if it isn't objectively factual.
    – Dale M
    Sep 23 '20 at 1:00
  • @DaleM So, can I understand this way: the agreed statement of facts is that the box is red, so the box is legally red even if it is objectively green?
    – dodo
    Sep 25 '20 at 0:51
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    @dodo agreed. Of course, for someone with red-green colorblindness, there’s no difference.
    – Dale M
    Sep 25 '20 at 3:18
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    @Dodo it's only red for Bob
    – Trish
    Sep 25 '20 at 5:28

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