Confidential information, also known as trade secrets.
What is confidential information? Examples include:
- compilation of information (e.g. client lists)
- salary information
- unpublished works of authorship
- industrial methods
- techniques and processes
- marketing and sales plans, and
- marketing forecasts and pricing information
used in a business that gives the proprietor an advantage over competitors who do not know or use it.
The law determines whether is “confidential information” by considering the following factors:
- Is the information widely known?
- Is the information a secret?
- Does the information have a value to the owner?
Answering Yes to all the above questions classifies the information as Confidential Information.
Claiming information is confidential does not make it “Confidential Information”.
For example: assume you and John enter into a confidentiality agreement. John gives you a copy of the front page of today’s Financial Review. The information on the front page of the Financial Review is known to the public. The Confidentiality Agreement does not alter the nature of the information. The information on the front page of today’s Financial Review remains public. No confidentiality agreement can change this fact. You will not breach the terms of the Confidentiality Agreement if you use any information on the front page of the Financial Review.
WHY MUST CONFIDENTIAL INFORMATION BE PROTECTED?
Most forms of intellectual property have a limited duration. Copyright is for the life of the author plus 70 years (there are some exceptions). The life of Confidential information is eternal. While the information is “secret”, it remains confidential information and protected by law.
The key to keeping and guarding confidential information is secrecy.
John Stith Pemberton invented Coca Cola in 1886. The formula has remained secret for 133 years. No one can market or sell a product which is precisely the same as Coca Cola. Keeping the recipe for Coca Cola secret maintains its uniqueness. The courts will protect the secret from misappropriation. The formula for Coke being kept secret makes it Confidential Information.
A court will penalise a person who steals or wrongfully appropriates a secret. You cannot protect an idea from a competitor who independently comes up with the same idea. If someone
independently develops what you have found and
kept secret and makes the information available to the public
you lose your protection.
The responsibility for keeping the information secret lies with its owner. You should only reveal confidential information (the secret) on a need to know basis. Limit access to your confidential information.
Example: Only State Business Development Managers need to know who your customers are. Not all your sales staff. By all means, not the receptionist.
Confidential Information is your advantage over your competitors. Remember to keep your trade secrets SECRET. You are the only one who can maintain the competitve advantage given to you by the law protecting your Confidential Information.
Take this quiz to see if you have the knowledge to protect your businesses Intellectual Property.
Want to know more about Confidential Information and Intellectual Property in general?
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