50 Confidentiality of Agreement; Non-Disclosure of Business Terms

Desired Result

Ideally, your e-resource agreement will not include a provision that restricts the dissemination of the agreement, itself. You may or should have a provision that protects the confidentiality of information exchanged or created pursuant to the agreement (such as Authorized User data), but the terms of the underlying agreement will not be confidential.

Sometimes, however, publishers will ask that the terms of the agreement itself be kept confidential. This can be problematic for several reasons:

1. As a preliminary matter, if you are at a public institution, it is likely that a third party could request the terms of the agreement anyway under a public records act. For instance, in California, the public may inspect and obtain copies of “public records,” which are defined as “any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency…” Arguably, the electronic resource license agreements that public institutions sign—particularly when those agreements govern resources available to the public—relate to the conduct of the public’s business, and therefore may be subject to public records requests. Any non-disclosure clause agreed to by such a library should allow for having to produce information pursuant to public records act requests.
2. In addition, courts and other government entities may compel an institution to share the agreements as part of legal proceedings or investigations. This is true whether the underlying institution is a public or private library. So, any non-disclosure clause should also provide an exception for disclosure when mandated by a court of law or other legal process.
3. Libraries’ missions typically reflect a desire for broad information access and sharing. In terms of e-resource agreements, the ability to disseminate the underlying agreement can help other institutions (perhaps less resourced institutions) negotiate similar outcomes. (This is in part why SPARC has a Contracts Library, California Digital Library shares Redacted License Agreements, and ESAC makes global transformative agreements available for download.) As a philosophical matter, restricting the free exchange of the agreement can impede libraries’ educational objectives and the rights libraries can achieve for users.

If publishers do request that the agreement itself remains confidential, try to see if they will confine the confidentiality request merely to pricing or “business” terms of the agreement. Typically, publishers are most concerned about not allowing licensees to share how much they paid to license the content^[1]. While we generally disfavor non-disclosure provisions, it sometimes is necessary to agree to them, and you can be more comfortable in doing so if they are limited to disclosures about costs (with appropriate exceptions for public records requests and governmental or legal process requirements).

What it means

We cover confidentiality and the importance of protecting private or personally identifiable information in another chapter. Courts uphold such non-disclosure terms when not contrary to public policy, and in the absence of indication that such terms result from coercion or overreaching. ^[2] When one of the types of information that publishers wish to keep confidential is the agreement itself, then your library must weigh the pros and cons of doing so: There are potential harms to the free exchange of information that would benefit users and the public in understanding the terms of the agreement. At the same time, agreeing to non-disclosure of certain terms may be essential to “close the deal.”

Desired language

Remember that the desired language for non-disclosure of the contract’s terms is no language at all! If the publisher is insisting on a non-disclosure provision governing the agreement, itself, try to limit the non-disclosure only to pricing terms. Here is a clause we’ve drafted:

Non-disclosure of pricing information. Unless otherwise agreed to by both Parties in writing, neither party shall give or disclose pricing information from this agreement to third parties, or use such information for any purpose whatsoever other than as necessary in order to fulfill its obligations or exercise its rights under this Agreement. Notwithstanding the foregoing, Parties may disclose pricing information from this Agreement (1) to employees, consultants, officers, directors, auditors, accounts, attorneys, advisors, and agents (including those of its affiliates) that have a need to know such information, or (2) if compelled by law or court order to disclose such information. In the event of law or court order requiring or compelling disclosure of pricing information, the Party subject to such order shall provide the other Party with adequate prior written notice as soon as is practicable, so that the non-disclosing Party may seek protective orders or other remedies. Each Party’s obligations under this Section will last for the Term of this Agreement and for a period of five (5) years thereafter.

Tricks & traps

If you are a public institution subject to public records act requests, reminding the publisher or vendor of such obligations may be a useful negotiating tool in pushing back on non-disclosure terms.

In all events, the most important things to bear in mind if you do need to consent to non-disclosure of contractual terms are to (a) limit the non-disclosure to pricing information and (b) create a carve-out for producing the information subject to a law (e.g. public records act request) or legal demand or order (e.g. deposition subpoena). These limits promote the free-flow of information and afford each party an opportunity to comply with applicable laws and legal requirements.

Importance & risk

Restricting the free exchange of the terms of the agreement can impede libraries’ educational missions and public relations, and impede the access or usage rights libraries as a whole are able to achieve for users. Non-disclosure provisions pertaining to the agreement should be crafted narrowly.