Confidence in business is a serious consideration, and business owners should educate themselves on this topic. Many law firms have strict rules and concerns regarding confidentiality. These rules should be treated as ‘commercial in confidence’ by both parties when disclosing sensitive information. Commercial in confidence and subsequent confidentiality agreements are essential to protecting a business’ […]
Want help creating the perfect business documents? Get your first 5 premium business documents for free by signing up.Confidence in business is a serious consideration, and business owners should educate themselves on this topic. Many law firms have strict rules and concerns regarding confidentiality. These rules should be treated as ‘commercial in confidence’ by both parties when disclosing sensitive information. Commercial in confidence and subsequent confidentiality agreements are essential to protecting a business’ intellectual property from competitors and other third parties, and are protected by equity and contract law.
So, what does ‘commercial in confidence’ mean? ‘Commercial in Confidence Australia’ refers to the sensitive information that an individual or business shares with another party in confidence. Thus, the information received by a person is not obligated to use or disclose this information without consent. Breach of this confidence is likely to give rise to a civil claim. Commercial in confidence can prejudice a person’s commercial interests, so to reduce the risk of breach, the information is protected by confidentiality agreements.
A Commercial in confidence statement can generally be found in a confidentiality clause within an agreement, which outlines the obligation to not disclose confidential information. Confidential information is any information or secret that could cause harm if revealed, so individuals should be cautious when discussing sensitive material about businesses.
Confidential information is any information that is intentionally kept from the public domain, but must be original, easily identifiable to the business and is not of public knowledge. Types of confidential information include:
Information of this nature will only be deemed as not confidential if it has become public knowledge without a breach, or is independently acquired without reference to the confidential information.
It is extremely important for businesses to protect their information in confidentiality agreements as it gives them greater control over the information they disclose to others. Additionally, confidentiality agreements, protecting commercial in confidence act as an effective deterrent to reduce the likelihood of business secrets escaping the company, and ending up in the hands of competitors. Additionally, confidentiality agreements reduce the likelihood of litigation, as they bind the other party and enforce an equitable right.
When referring to commercial in confidence in the private sector, one is generally referring to the principle of freedom of contract. Parties to a contract are free to communicate as they please, and for this, commercial in confidence is generally imposed as an express term in a contract, confidentiality agreement or a non-disclosure agreement.
For the public sector, commercial in confidence is restricted by legislation regarding the Government’s entitlement to contracts. The Freedom of Information Act 1982 (Cth) states that the government’s contracts have an obligation to the public, and thus, it is rare that commercial in confidence is seen in the public sector as there must be an overriding public interest against disclosure.
Generally arising out of employment relationships where trade secrets are disclosed, regardless of whether there is a written agreement in place, there may still be an equitable duty of confidence binding the parties. A duty of confidence is the obligation for parties to the confidential information to private. So long as there was an obligation to keep the information confidential, a duty of confidence does not need to be confirmed in a contract. Although it is not the best practice to rely solely on the equitable duty of confidence to protect your information, you can mark the document as confidential or limit the access to only those required to understand the information.
NDA’s are a big thing in the movies, especially legal dramas. Non-Disclosure Agreements (NDA) is a legally binding contract that establishes a confidential relationship between parties. This agreement protects potentially sensitive information, and ensures that there is no communication to any third party outside of the agreement, about anything listed in the contract. NDAs can also be referred to as a confidentiality agreement. NDAs are used in Australia frequently in many industries, ranging from commercial to media, and are used to protect trade secrets between companies by binding employees. NDAs are in place indefinitely and are not required to be registered to be valid. Organisations can use NDAs instead of patents as they do not expire, whereas a patent only lasts 20 years.
If you break or violate a Non-Disclosure Agreement, you are likely to be in big financial trouble, as the breach can leave you vulnerable to lawsuits. The legally enforceable contracts could require you to pay financial damages and associated legal costs. Lastly, regardless of whether you have signed an NDA it is illegal to reveal trade secrets of a company under the Corporations Act 2001 (Cth), and can result in legal consequences such as jail time or fines.
For commercial in confidence information and as an employer or business owner, it is not a bad idea to create a confidentiality agreement, specifying:
This agreement is likely to ease any anxiety you may encounter when entrusting someone with sensitive information.
You must first be able to prove the breach. From there, a court will determine:
Is your intellectual property protected?
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