The Receiving Party shall not reverse engineer, decompile, or disassemble any software, prototypes, or other tangible objects provided by the Disclosing Party, or attempt to do so, except and only to the extent that such activity is expressly permitted by applicable law notwithstanding this limitation.
Here is a plain English explanation of the Reverse Engineering Prohibited clause:
- The Receiving Party is the party getting software, prototypes or other tangible items from the Disclosing Party.
- The Receiving Party agrees not to reverse engineer, decompile or disassemble these items.
- Reverse engineering means taking something apart to see how it works.
- Decompiling and disassembling mean similar things, like converting back to source code.
- The Receiving Party cannot try to do these things to discover trade secrets.
- However, they may reverse engineer only if the law specifically allows it, despite this clause.
- The purpose is to protect the Disclosing Party's intellectual property and trade secrets.
- It prevents the Receiving Party from stealing proprietary information through reverse engineering.
- But it permits reverse engineering in limited cases where laws expressly authorize it.
Overall, this clause balances protection of proprietary information with legal rights to reverse engineer in specific situations.
Prohibitions against reverse engineering have their origins in trade secret protection and patent laws starting in the 1800s.
As technology advanced, courts recognized reverse engineering could improperly uncover innovators' IP. An early 1896 case enjoined a knock-off product created through reverse engineering.
By the 1970s, software licensing grew prevalent. Copyright law alone proved insufficient to protect code secrets. Licensing contracts contained specific reverse engineering bans to guard source code confidentiality. The seminal 1974 case Lear v. Adkins validated these clauses, deeming source code "appropriate subject matter" for trade secret protection.
In the 1980s and 1990s, non-competes and reverse engineering clauses proliferated in tech sectors. However, courts scrutinized overbroad prohibitions violating public policy favoring competition and innovation. Reasonable drafting became necessary to balance IP protection and lawful reverse engineering rights.
The seminal 1995 case Atari v. Nintendo affirmed reverse engineering prohibitions in licensing agreements, while carving out fair use reverse engineering privileges. This established today's contractual framework permitting only limited reverse engineering expressly authorized by law.
As technology continues rapidly evolving, reverse engineering clauses remain essential to protect trade secrets. But drafting nuance is critical to avoid overreach into statutorily-granted reverse engineering rights.
The careful balance between intellectual property protection and lawful reverse engineering endures as a key consideration.