Third party information: Overview, definition and example
What is third party information?
Third party information refers to data, materials, or content that is owned or provided by an external party not directly involved in a contract or agreement. This could include intellectual property, proprietary data, or confidential information belonging to a third party that is shared, used, or referenced under the terms of an agreement. Contracts often include provisions addressing the use, protection, and rights related to third party information to ensure compliance with applicable laws and respect for ownership rights.
This term is commonly encountered in licensing agreements, confidentiality agreements, and data-sharing arrangements.
Why is third party information important?
Third party information is important because it establishes boundaries and responsibilities when dealing with content or data that does not belong to either party in the agreement. For businesses, addressing third party information in contracts ensures that such information is used appropriately, minimizes the risk of intellectual property disputes, and complies with confidentiality or licensing obligations.
Including clear provisions for third party information protects the parties involved from liability, ensures proper handling, and fosters transparency about how external data or content is to be treated.
Understanding third party information through an example
Imagine a software company licenses a data analytics tool from a third party and uses it to provide services to its clients. The agreement between the company and its clients includes a clause explaining that the data analytics tool is third party information, and the client cannot copy, reverse-engineer, or sublicense the tool. This protects the rights of the third-party provider and ensures compliance with the software company’s obligations.
In another example, a marketing agency works with a client who provides a database of customer contacts owned by a third party. The agency’s contract specifies that the client is responsible for ensuring they have the rights to share this third party information and that the agency must handle it in accordance with data protection laws.
An example of a third party information clause
Here’s how a third party information clause might appear in an agreement:
“The Parties acknowledge that certain information, materials, or data provided under this Agreement may constitute third party information. Each Party agrees to handle such third party information in compliance with applicable laws and any licensing or confidentiality obligations imposed by the third party. Neither Party shall acquire ownership of or rights to third party information beyond those expressly granted in this Agreement.”
Conclusion
Third party information provisions are crucial in agreements that involve external data, content, or intellectual property. By clearly defining how such information is to be used and protected, these clauses minimize risks, ensure compliance with legal and contractual obligations, and safeguard the interests of all parties involved. A well-drafted provision promotes accountability and reduces the potential for disputes.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.