Intellectual Property Protection

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Confidential Information
This is 'secret', information in that it is not in the public domain. Generally it is information not known by competitors and is of value to the originator and owner. It will also be of value to another party who wishes to compete.

The 'confidential information' businesses try to protect often extends to business plans, strategies, procedures, systems and plans. It might be a trade secret providing an advantage in the market

Minimise the risk
A defence that has been successful in the past is where a breach of confidentiality has been ‘not proven’ through being found to be ‘not confidential’ because it is in the public arena and there was no formal obligation on the recipient to keep such information secret.

Formal signed documentation can prove valuable in enforcing confidentiality and in proving the recipient was fully aware and had agreed to keep the information confidential. The more commercially sensitive and commercially valuable the information you are passing, the more restrictions on its use and disclosures should be put in place.

In support of the formal agreements businesses should put in place written procedures to keep confidential information safe. These formal procedures should include the limiting in the giving of the information to only employees or contractors who need it and those that have signed a Confidentiality Agreement. Then keeping the information in a secure environment, marking documents ‘confidential’, ensuring sensitive information is destructed professionally and ensuring the recipient is formally notified of the obligations of confidentiality (signed off and witnessed).

Increasing your chances
If there is a breach the onus of proof will lie with the owner of the confidential information. Under common law a business is protected only to a degree. You are well advised to be in a position where you can prove (to a court) the confidential information is commercially valuable, confidential and of competitive or sensitive value. Additionally you will be called on to prove the recipient of the information was of the understanding there were obligations of confidentiality when the information was passed. You will also need to prove there was a breach of confidentiality by the person who received it.

We recommend that you originate a system to quantify the value of any losses or harm incurred as a result of the breach. Being well prepared is critical.

This guide offers business owners several options to implement that will assist to protect their:

business systems
business plans & strategies
procedures and processes
formulae
client lists
confidential and commercially valuable or sensitive information
products
trade secrets
staff

These options include:

1. Restraint of Trade clause for agreements
2. Confidentiality Agreement (Non- Disclosure)
3. Non Solicitation clause for agreements
4. Statutory Declaration System
5. Garden Leave clause for agreements
6. Label Documentation 'Confidential'

We recommend that all six are implemented in those cases that are appropriate. Business owners are well advised to identify exactly what is at risk, quantify it, and decide which positions in the business present an exposure. The clauses and agreements are not appropriate for employees who do not present an exposure or for indiscriminate use.