Each enterprise must interact with multiple third parties, including suppliers, vendors, investors and similar companies. In some cases, the interactions involve sharing trade secrets, which must be protected from unauthorized disclosure. A nondisclosure agreement, also called a confidentiality agreement, is the ideal tool for trade secret protection and it must be drafted and signed before any sensitive discussions with external third parties. Crowley Law LLC has extensive experience with these agreements and can help you draft and enforce reasonable measures for optimal trade secret protection.
A trade secret is a type of intellectual property comprising confidential information that is not generally known and provides a business with a competitive advantage. For example, in the tech world, this could be closely-guarded code that powers a cutting-edge program or app. In the biotech world, it could be processing parameters for the creation of specific biological products. You should note that, unlike a patent or copyright, a trade secret is not registered with any government agency and can be protected indefinitely (e.g., think of the formula for Coca-Cola). However, the protection is lost once the secret is disclosed or independently discovered.
In the United States, several conditions must be met for confidential information to be considered trade secrets. These include:
Note that trade secrets are quite dissimilar from confidential and proprietary information. Confidential information broadly refers to all non-public data, which may include trade secrets and proprietary information. On the contrary, proprietary data is any information owned by an individual or company, be it a trade secret or not. Conversely, a trade secret refers to more specific information that primarily contributes to a business’s competitiveness. It has additional protection under trade secret laws due to its high value.
Nondisclosure agreements are indispensable for trade secret protection. Some of the benefits you should expect by signing such a contract before discussing confidential matters with external parties include:
As the disclosing party, you can legally protect your trade secrets. You will also have legal grounds to act against any breaching party that uses or discloses your trade secrets without authority.
Your trade secrets are what differentiate you from your competitors. By drafting nondisclosure agreements with external third parties, you provide for trade secret safety and sustained competitiveness.
Nondisclosure and confidentiality agreements reinforce your intellectual property (“IP”) ownership. By signing such an agreement, the receiving party acknowledges that your confidential information and trade secrets will remain yours in all events.
A nondisclosure agreement will deter external third parties from attempting to steal or disclose confidential information. The prospect of severe legal consequences for violating the contract is particularly useful.
Trust and confidentiality are invaluable in the ever-evolving life sciences and other technology industries. Nondisclosure and confidentiality agreements are the standout solutions to sustaining trust and confidentiality since they not only help you build a productive business relationship with external third parties but also preserve your competitive edge. You need legal counsel to draft, enforce and update robust agreements that will fortify your secrets and confidential information. Crowley Law LLC can help you meet this objective through several critical legal services. These include:
We help life sciences and other technology companies draft and update nondisclosure agreements that are tailored to their confidential information and specific needs. This includes specifying exactly what information is considered a trade secret.
We ensure that nondisclosure agreements clearly define the scope of what is protected. We also help you determine reasonable term lengths for the agreements while protecting trade secrets indefinitely.
We help businesses define clear obligations for external third parties to maintain confidentiality. We also ensure enforceable restrictions on the use and dissemination of trade secrets.
We assist businesses in monitoring compliance, ensuring breaches are detected and addressed. We also take legal action on behalf of our clients when the company finds out that a trade secret is disclosed or misappropriated.
We offer advice on relevant digital security measures to protect confidential information, such as encryption and access controls. We also help develop protocols for handling and sharing sensitive information.
In general, confidential information that provides a competitive edge is treated as confidential within a company and is not generally known to others, so it can be categorized as a trade secret. This encompasses both technical and commercial information.
A trade secret is protected by providing adequate means of keeping it secret through policies and procedures and physical lock-up where appropriate. Hence, it is the owner’s responsibility to sustain secrecy. A trade secret is also protected for an unlimited period unless it is legally acquired or independently discovered by another party.
In order for valuable information to be protected from public knowledge, three main requirements must be met:
Trade secret protection confers owners the right to prevent the subject information from being acquired, disclosed or used by others without consent. Thus, under the terms of a nondisclosure agreement, the disclosing party can seek injunctive relief, monetary damages or other forms of compensation from the receiving party for any unfair practices with respect to the trade secret. This may include inducement to breach a contractual obligation, breach of contract or commercial and industrial espionage.
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