Q What are some things that should be considered when deciding whether to have a confidentiality agreement or another type of agreement to protect intellectual property rights? A A confidentiality agreement is often the gateway for targeted discussions that lead to business relationships. As such, it is vital that the agreement is written with consideration of the context of the specific relationship, the information being disclosed, and how it may be used. Beware of “boilerplate” agreements with overly broad terms. A strong and well-written confidentiality agreement can prevent potential partners (and competitors) from mishandling and/or misappropriating valuable intellectual property rights. The most important consideration is a balance between the discloser's need for protection and the recipient's need for the information prior to making a business commitment. Even with a confidentiality agreement the level of disclosure should be limited to only the necessary confidential information for the related matter. Some common areas of concern involve issues as simple as identifying the correct legal parties to more strategic decisions around what level or type of information will be disclosed and received and by whom. It is necessary to conduct proper due diligence and consult a legal advisor prior to entering into any type of agreement.
Q Why is it important to define the “confidential information” in a confidentiality agreement? A The definition of confidential information in the agreement should be specific, understood by the parties, and relevant only to the use of the information within the purpose of the agreement. Of course, a broader definition would be preferable to the disclosing party, while the recipient would benefit from a narrower description. Similar positions are typically held by discloser and recipient regarding the need to mark or otherwise identify disclosed information as being
Some exceptions to confidentiality include: 1. information that is generally known or publicly available 2. in possession of the receiving party, 3. lawfully received on a non-confi- dential basis from third parties
confidential. The disclosing party has the burden to identify which information is confidential. This can be done one of two ways: • Written disclosures – marking “CONFIDENTIAL"; and • Oral disclosures – memorialize in a follow-up disclosure within some time period. Consideration should also be given to information that was or is independently developed by the receiving party without any use of the disclosing party’s confidential information. This may be especially important to allow a company to exploit developments that may be technically related to the confidential information that was disclosed.
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