Watford Solicitors

INTELLECTUAL PROPERTY FAQS – SOLICITORS WATFORD

Confidentiality Agreements

Confidentiality agreements are designed so that parties to an agreement agree to keep certain information disclosed to them all secret and confidential.

Confidentiality agreements are normally agreed between two or more parties during development stages of a business concept or idea. The parties are then able to discuss matters freely once the agreement has been signed.

The idea behind this type of agreement is that the creator of the idea or concept will be able to disclose it without fear of other parties reproducing or selling it, or disclosing it to a third party.

It may well be that one party wants to disclose confidential business data for the purposes of pitching for business or to enable a sale of that business. In both cases the dislcoser of the information will want to ensure that the information remains secure and is not exploited by the party to whom it was disclosed.

If this happens, the injured party can sue for breach of contract and may be entitled to damages if he can show loss. The injured party which owns the confidential information may also be able to go the court and seek an injunction to prevent the continued use of that information.

The Parties to a confidentiality agreement can be separated between ‘the disclosing party’ and ‘the receiving party.’

In order for this contractual relationship to be legally binding it is necessary to provide ‘consideration’. This can easily be done by the ‘receiving party’ paying the ‘disclosing party’ a nominal amount of £1.

The big problem with confidentiality agreements is actually enforcing the agreements. It can be very difficult and very costly to prove that information has been stolen or exploited. As a result of this many large businesses have been known to take advantage of inventors and still use the information despite the fact that a confidentiality agreement has been signed as they know most people do not have the stomach or the money to fight and fund expensive litigation. Many a large business has therefore gone onto using the inventions and creations of others without permission.

That said it is professional to get an agreement in place and if you need to rely on it and you can choose to do so. Without the agreement you will then not be in such a strong position.