Are Your Confidentiality Agreements Enough To Protect Your Business?
Parties who engage in preliminary business transactions where proprietary or confidential information is shared before the ink has had time to dry often, or should sign confidentiality agreements forbidding disclosure or unauthorized use of the confidential information before proceeding with their arrangement.
Drafting an effective confidentiality agreement is vital to operating a successful business, especially businesses in which intangible assets such as intellectual property and trade secrets are heavily relied upon. Relying on generic and potentially outdated documents floating around the internet is risky because they may not protect your business from someone stealing its assets. You should hire an experienced attorney who can craft an agreement to meet your specific needs.
However, even a well drafted confidentiality agreement may not protect your business assets if you do not understand the fundamental concept of confidentiality as it applies to the law. For example, the Seventh Circuit Court of Appeals, in nClosures, Inc. v. Block & Co. held that a confidentiality agreement entered into between a product designer and a manufacturer was unenforceable because the owners of the confidential information had not taken reasonable steps to protect its confidentiality.
nClosures provides a valuable reminder to trade secret owners that obtaining confidentiality agreements—while important—is not enough to protect the confidentiality of those trade secrets. Vigilance during the lifespan of a trade secret is needed, because even if lapses in trade secret protection are not directly related to a confidentiality agreement, the enforceability of that agreement can be lost.
If you have any questions regarding how to protect your business or personal assets from competing businesses, business partners or simply from being the subject of litigation, call the attorneys at Andre Evans & Associates, PLLC. at 832.304.1054 or email me directly at email@example.com
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