So exactly what is the importance of a Confidentiality Agreement?

Without any doubt - Confidentiality Agreements are the ULTIMATE method of protecting the "IDEA" behind your undeveloped concept including:-

  • Business Schemes
  • Systems
  • Methods
  • Know-how - New Technonlogies
  • Discoveries

Guide to The Legal Force of Confidentiality Agreements (in part – full version on disc)

THE RECEIVER of private information is placed under a "LEGAL OBLIGATION" of trust and shall be bound by the terms of that present Agreement not to make any unauthorised use of information obtained directly or indirectly, or act in any manner which would be detrimental to the Submitters Intellectual Property (IP) or act in any other manner that would constitute Breach of Confidence (Law)

In Part:

"A person who has obtained information in confidence is not permitted to use it as a "Spring-board" for activities detrimental to the person who made the confidential communication, and spring-board it remains even when all features have been disclosed".

In a (UK) landmark appeal concerning BREACH OF CONFIDENCE "MISUSE OF PRIVATE INFORMATION", Lord Greene, a former Master of the Rolls, stated as follows

"There is no better way of really understanding something than to try and improve it – if you produce a different result, it is absurd to say you never made use of the THING which you set out to improve".

He went on to opine.

"The mere simplicity of an idea, does not prevent it being confidential, and indeed, the simpler an idea the more likely it is to need protecting! For information to be confidential it must have (apart from the contract) the necessary quality of confidence about it. It is therefore, perfectly feasible to have a confidential document, be it a METHOD, FORMULA, SYSTEM, SCHEME or a PLAN which contains information, which describes a person's Ideas or 'know-how' on achieving the end product. What makes it confidential is the fact that the maker of the (The Subject Matter) has used his brain, skill and ingenuity and thus, produced a result which can only be produced by somebody else who goes through the same process".

Lord Green concluded:

"If a case of breach of confidence is to succeed THREE principle elements need apply:
(1) The information itself must have the necessary quality of confidence about it…
(2) The information must have been imparted in circumstances importing an obligation of confidence…
(3) There must be an unauthorised use of that information to the detriment of the Party communicating it".

The test, which is most often used by the Courts in deliberating whether information is accessible, involves an assessment of whether any special labours would be necessary for a member of the public to reproduce it.

For example: If the information to the – Idea, Invention, or Service ("The Subject Matter") can only be reproduced by the involvement of a cost of labour, materials and 'know-how' of the person conceiving the Idea, it would be seen as confidential.

This LEGAL Authority is Now supported by:-

Articles 8- 10 (PRIVACY) of The Human Rights Act. (UK 1998)

Other considerations

  • Professional Fees in most major Cities now exceed SEVERAL Hundred Pounds Per hour!
  • Confidentiality Agreements like GUARD IDEAS™ would take several hours to prepare by an experienced practitioner – thus demonstrating the low costs of our product/service and the high value we place on all our valued clients.
  • You must always show respect for the other Party's Confidentiality! – They have equal rights so respect them!

How long are you obliged to keep information confidential?

In theory the obligation is for 'life' – but this is now considered by the Courts as being unreasonable and therefore, difficult to enforce. Unless specified for longer periods obligations of confidence are automatically terminated after 5 YEARS (or before if the confidential information comes into the Public Domain)

REMEMBER – your Know-how – or New Technology appertaining to your filed Patent Application are not patentable, without the whole of the package deal. A number of Companies may not be interested in your actual PATENT, but more keen to obtain information on your Know-how, or technology.

So do not be misled by thinking that just because you have filed a Patent Application– this protects your rights. You have NO rights to anything until AFTER you have received your Patent Grant.

Therefore, the only legal SAFE-GUARD you have in exchanging ideas or technology is by using a Confidentiality Agreement before making a disclosure of Confidential information.

CAUTION: Whenever using a Confidentiality Agreement:-

Do not over-describe the subject matter…

  • In theory;
    the SUBMITTER of information must adequately describe on the document what is the nature of the "information" he wishes to disclose in confidence to the other Party.
  • But in practice however;
    problems could arise if a SUBMITTER of an Idea over describes the IDEA on the confidentiality agreement, before it is signed by the other Party. – if the other Party knows of your great Idea – before signing your document – he may not sign it or be bound to confidentiality.
  • Still be alert;
    Even expressing just the Idea without going into any specific detail is usually enough for a person to grasp the full significance of what's in your mind - So it is paramount that you exercise extreme caution, whenever disclosing the Idea to anyone,– even if you have filed a Patent application, assuming the idea is ultimately Patentable.
  • Not all companies will sign your document!
    You may find that a number of Larger Corporations will show extreme reluctance in signing Confidentiality Agreements. Or they may insist that you file your Patent Application first.

But what if your Idea or Concept is not Patentable? We advise in our "INFO-PACK" and provide you with a solution!

Be Aware

Many Companies are not always interested in whether you have filed a Patent Application Some Companies could be more interested in your Know-How or New-Technological improvements – especially if they are developing similar lines: So only pass information under notice of confidentiality.

Choice of Law

Theoretically, most countries have different domestic laws or customs. The legal principles of Breach of Confidence "Misuse of Private Information" [LAW] is basically much the same from one country to the next.

DECLARATION: It is our belief that Guard-Ideas™ document fulfils the LEGAL TEST of creating obligations between the Parties. Nevertheless, if you are in any doubt whatsoever, it would always be desirable to consult with a local lawyer to examine the document against local standards.

With our expressed authority :- We have no objection to any CLAUSE in our document being slightly modified to meet any specific local standards. Any amendments necessary for this express purpose will not have any detrimental effect upon future claims made under or our Legal Cover scheme.

Read 'What should I avoid?'