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Do's and Dont's of Confidentialty Agreements

By Todd Wilson Many growing businesses face the problem of having ideas that will give them a leg up on the competition or new products that will revolutionize their industries but lack the financial or intellectual resources to, without the assistance of partners, bring those ideas to fruition or to bring the products to market. Even more established businesses often find it necessary to supplement their own internal resources with ideas and products from other businesses. These are situations in which confidentiality agreements become an important means of intellectual property protection for such businesses. Confidentiality agreements create a contractual relationship between the parties whereby one party agrees to disclose otherwise confidential information and the other party, in return, agrees to refrain from further disclosing that confidential information to others. If the party to whom the confidential information is disclosed breaches the contract and makes the confidential information known to others in violation of the terms of the contract, the owner of the information will have an action for breach of contract. This typically means that there is the potential for money damages to help recover the monetary damage caused by wrongful disclosure or even injunctive relief in an effort to stop ongoing disclosure. Usually, the threat of such these remedies is sufficient incentive to discourage wrongful disclosure. It should be noted, however, that wrongful disclosure results disclosure of the confidential information, nonetheless. Once the cat is out of the bag, so to speak, the confidentiality of the information is lost forever. Therefore, it is of utmost importance to ensure that the parties with whom you enter into confidentiality agreements are credible and have processes in place to maintain the confidentiality of the information that your company discloses to those parties. To continue reading click here.

Full post as published by The Trade Secrets Vault on November 10, 2008 (boomark / email).