We reported last month that the Delaware Chancery court had found that the terms of a confidentiality agreement precluded one party to merger discussions from subsequently using confidential information from those discussions in order to mount a hostile bid against the other party (thereby effectively turning a NDA into a standstill): Martin Marietta Materials Inc v Vulcan Materials Co, 2012 Del Ch LEXIS 93. The Chancery court relied in part on the Ontario decision in Certicom Corp v Research in Motion Ltd (2009) 94 OR (3d) 511 in its analysis of the contractual language. An appeal from the Chancery decision has been dismissed by Delaware’s supreme court: Martin Marietta Materials Inc v Vulcan Materials Co, 2012 Del Ch LEXIS 93.

The Chancery court relied in part on the Ontario decision in Certicom Corp v Research in Motion Ltd (2009) 94 OR (3d) 511 in its analysis of the contractual language. An appeal from the Chancery decision has been dismissed by Delaware’s supreme court: Martin Marietta Materials Inc v Vulcan Materials Co (SC Del, 10 July 2012). The Supreme Court concluded that the court below was correct in finding that the NDAs prohibited the use of confidential information for a hostile bid, that doing so was breach of the agreements and that injunctive relief was the appropriate remedy. There is no discussion of Certicom, however. The argument that the Chancery court had ‘stealthily’ converted the confidentiality agreements into a standstill was rejected. While the two types of agreement are different, the Chancery court did not unduly conflate them; it merely interpreted the confidentiality agreements according to their terms.