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Preserving Maps: Maintaining the Secret While Disclosing Seismic Data

Seismic data is essential to the evaluation of oil and gas prospects. While some oil and gas deals still close without review of seismic data, such a situation is rarely the case. Simply put, seismic data is a key for evaluation of a certain prospect versus other prospects. So, it is natural for a potential buyer to ask for access to seismic data from the seller. Once a deal is closed, a question often arises regarding how does the seller, as owner of the seismic data, on one hand make it available to the buyer, but also protect its seismic data from others. Below are several recommendations for sharing seismic data yet keeping it a valuable trade secret: 1. Require non-disclosure agreements for any party gaining access to seismic data; 2. Add language in any non-disclosure agreement or contract requiring the party obtaining access to the seismic data acknowledge that the data is a valuable trade secret; 3. Require written permission for any party to share the seismic data; 4. Clearly identify who owns the seismic data; and 5. Consider adding a penalty or liquidated damages clause for any unauthorized disclosure of seismic data.

The first rule of owning any trade secret is for the owner to take reasonable measures to keep the data secret or otherwise unavailable to the public. Sharing seismic data while not keeping the data confidential can be the fastest way to lose trade secret protection. Seismic owners must stay vigilant in protecting the confidentiality of their data.

Requiring a party to acknowledge that the seismic data is a trade secret and is valuable is important if any dispute arises regarding the seismic data. The acknowledgement that the data is valuable can also help dispel any suggestion during litigation that seismic data is not worth much. Requiring a party to obtain written permission to share the seismic data is another limitation that further restricts distribution of the data without the knowledge of the seismic data owner.

One important consideration is adding a penalty for any unauthorized sharing of seismic data. This penalty could be termed a “license fee” for access to the seismic data or a liquidated damages clause, which sets the amount to be paid in the event of an unauthorized breach. By adding a provision setting the “penalty” the seismic data owner can avoid having to hire a damages expert in litigation to opine on the amount of the license fee and damages. Having the party obtaining access to the seismic data to agree and acknowledge this type of provision can save thousands of dollars in any dispute involving the seismic data. If you have any questions regarding how to protect seismic data while also providing seismic data to potential business partners, acquirers, or any other parties, you should seek the legal advice from attorneys with experience in this field of law.

More from this series: Treasure Maps: Seismic Data in the Oil Patch and How to Protect It Seismic Data: Damages for Stealing the Treasure Map

For more information on this topic, please visit our Trade Secret Litigation service page, which is part of our IP & Business Litigation Practice.

Klemchuk LLP is an Intellectual Property (IP), Technology, Internet, and Business law firm located in Dallas, TX.  The firm offers comprehensive legal services including litigation and enforcement of all forms of IP as well as registration and licensing of patents, trademarks, trade dress, and copyrights.  The firm also provides a wide range of technology, Internet, e-commerce, and business services including business planning, formation, and financing, mergers and acquisitions, business litigation, data privacy, and domain name dispute resolution.  Additional information about the litigation law firm and its litigation attorneys may be found at www.klemchuk.com.

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