Intellectual Property Law
Protection of Confidential Information
Non-disclosure or confidentiality agreements are contracts signed between two or more parties in order to protect sensitive information that must be shared as a matter of business. There are many many business situations that arise where protection of confidential information is paramount. for instance, employers often require their employees (as well as independent contractors, consultants, and other third parties) to sign non-disclosure agreements to protect proprietary information. Trade secrets, patent information, financial information, business practices, customers’ personal data, supply sources, financial forecasts, and client lists are examples of proprietary information that are addressed in a non-disclosure agreement. These agreements often include clauses and requirements that protect both parties, the disclosing party and the receiving party.
Non-disclosure agreements are commonplace in connection to licensing agreements. When entering into a licensing agreement, licensors should ensure that any and all confidential information related to their intellectual property is protected through a non-disclosure agreement. A non-disclosure agreement ensures that whatever sensitive information is shared remains confidential and protected from third parties.
As with licensing agreements, non-disclosure agreements should be drafted carefully to fully establish the scope of the agreement. The simple outline below covers common clauses contained in non-disclosure agreements but in reality these agreements can be quite complex and contain very specific requirements and details. An experienced attorney can help draft an agreement that covers virtually every angle and possible situation that may arise.
What information is confidential?
This may seem redundant, but be very careful to enunciate the specific items that each party is privy to. What exactly is confidential? List these items in detail. Examples include patent information, financial details, e-mails, voice messages, etc. What information is considered public domain? It is good practice to include those items as well.
What information can the receiving party share and to what extent? Can the information be shared on a need to know basis? What restrictions are placed on sharing information with third parties engaged in mutual business transactions?
How long will the agreement be in effect? What restrictions are set on the receiving party after the business relationship has ended?
Remedies in Event of Breach
What are the remedies in the event of a breach? Are there different legal remedies to be applied in the event of a direct (blatant) violation as opposed to an indirect (accidental or negligent) violation? Damages and injunctive relief should also be addressed in the event a breach occurs.
Non-Disclosure Agreement Litigation
If a party blatantly violates a confidentiality contract, they can be prosecuted to the full extent of the law. If a party accidentally violates the contract, they may still be liable depending on the terms of the contract agreed upon. Parties that enter into confidentiality agreements are held to a certain standard of care and if they cause information to leak due to negligence, they are still responsible for breaching the confidentiality agreement. Our attorneys have a solid foundation of over 50 years combined experience in protecting individuals’ and corporations’ intellectual property and business transactions. If you are interested in a telephone or in office consultation, please use the contact form on this page or call us directly at (410)752-1261 (Jan I. Berlage) or (410)752-9300 (David L. Hankey).