How to protect against the theft of confidential business information

Written by Charlotte Owens | February 15, 2022

Intellectual Property

Keeping your business information confidential is key to protecting your valuable trade secrets. It minimises the risk of your competition finding out about your keys to success. And it stops your sensitive data from getting out into the open and into the wrong hands. But how can you protect confidential information and what can you do in the event of a breach?

What is confidential information?

Confidential information covers an array of different types of material. It is an umbrella term for information which:

  1. Has the ‘necessary quality of confidence about it’. Meaning, the information has not already been in the public domain.
  2. Has been communicated in circumstances ‘importing an obligation of confidence’. Meaning, it is clear from how the information was communicated that it was confidential in nature. For example, if it was subject to confidentiality clauses in a contract, was provided to an employee by an employer, or was clearly a trade secret or sensitive commercial information, and so on.

How to protect confidential information

You can protect confidential information by using contracts. As a business owner, you should govern all relationships through contracts. This is an extremely important first step to protecting your confidential information.

Maybe you are a start-up business with a brand new idea that you don’t want your potential competitors to hear about. Or perhaps you’re an established business with an array of confidential know-how and trade secrets. Regardless, it is key to have strong contractual clauses in place with both internal and external relationships.

Internal relationships include employees, directors and shareholders. External relationships include consultants, manufacturers, and distributors.

Doing so makes it clear from the outset that the information is confidential in nature. The other party confirms it is aware of the confidential nature by acknowledging and signing the contract.

As such, it is important that you frequently review your existing contracts with third parties who can access any of your confidential information. You must ensure that the confidentiality clauses within them are watertight and cover what you want to protect.

Using Non-Disclosure Agreements (NDAs)

Sometimes, you may need to disclose your confidential business information to parties who are not already in a contract with you. For example, when you are speaking with potential investors, manufacturers, or suppliers.

We highly recommend that you do not assume that these discussions are confidential. We advise entering into a non-disclosure agreement with the other party so that you can be confident there are confidentiality clauses in place. This will stop them from using your ideas or sensitive business information against you or with a competitor.

Whether you are an established business owner or a brand-new start-up, having a template non-disclosure agreement to hand can be valuable. Here at Briffa, we can produce a tailored non-disclosure agreement for your business. You can then use it again and again with third parties to give you peace of mind when having sensitive discussions.

What happens if somebody discloses my confidential information?

Unauthorised disclosure of confidential information, or using information beyond the purpose for which it was provided, can be enough to constitute a breach of confidence. In such an event, you may be entitled to make a legal claim.

If your confidential information has been disclosed by another party and you are unsure what to do next, please feel free to get in touch with one of our solicitors. We can talk you through the next steps on a case-by-case basis.

Get in touch

No matter what stage you are at with your business, protecting your confidential information is a vital step. It is, therefore, crucial that you have strong contractual terms in place with everyone who has access to it.

Our specialist data protection solicitors can carry out a review of your current contracts. We can also produce bespoke contracts for you to use going forward with third parties, depending on what stage you are at.

We would be happy to offer you an initial free consultation to discuss what works best for you and your business. Simply contact us at info@briffa.com or on 020 7288 6003.

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