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What IP Do You Own? (5)

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Trade secrets and confidential information

During the course of its operations a business is likely to develop and acquire a good deal of valuable experience and information. This confidential information may well form a very significant part of a company’s value on sale or other succession. It is important to consider how this may be protected from disclosure – in particular to competitors. The most likely sources of ‘leaks’ are employees (or former employees) and contractors.

Once again early advice could save some costly mistakes. Advice as to the terms of employment of staff will lead to contracts of employment containing clauses preserving confidentiality of commercially sensitive information such as commercial processes and accumulated data. Similarly contracts of engagement of subcontractors should contain confidentiality clauses.

It is not always cost-effective or desirable to take action to protect confidences. Limiting the number of people having access to the information is an important practical step and is commonplace in many industries. How many people know the recipe for valuable brands of drink (eg Coca Cola) or perfumes (eg Chanel No 5)?

The importance of confidentiality agreements in the case of disclosure of inventions cannot be overstated. The right to a patent is lost if the invention is in the public domain. Similar considerations apply to design rights.

See also our notes on … Intellectual Property and our Self audit of IP … and watch out for the next post in this series.