Commercial secrets - confidentiality agreement

Sydney Mitchell Solicitors

When companies begin to deal with each other, whether it be for the supply of goods or because of a joint venture or merger between them, sensitive information and even commercially valuable intellectual property, will often be shown by one company to the other, or shared, during the contract process.

Usually, the contract eventually signed, will deal with confidentiality.

However, valuable information will also often pass between companies before they enter into a contract with each other.

In such cases, it is vital that the companies enter into a confidentially agreement, or NDA, before any commercially valuable information is shared.

Imagine the following scenario. Company A starts to talk to company B about supplying communications technology to company B, which company B would then sell to an overseas air force.

Negotiations begin without any confidentiality agreement being signed.

The communications technology is highly valuable intellectual property, which company A must keep away from its competitors, in order to remain competitive.

But what if company B is taken over during pre-contract negotiations by one of company A’s competitors?

Or, what if company A’s valuable commercial information is leaked by company B?

Unfortunately, there is not a lot that company A can do, once the commercial information has been shared with the other company.

Companies with valuable commercial information should always enter into a confidentiality agreement, before letting any other company have access to it.

It is not a complicated or lengthy document, and other companies do not usually have an issue signing one, especially if it is mutual, and both companies can benefit.

For further information, please contact Suzanna Patalong on 0121 698 2200 or or complete our online enquiry form.