The Difference Between Confidentiality Agreements and Trade Secrets

A lot of people tend to be confused over what they know to be a confidentiality agreement, and what they know to be a trade secret. Is one automatically the other? Do you need a confidentiality agreement for something to be treated by a court as a bona fide trade secret?

What is a Confidentiality Agreement?

A confidentiality agreement is just an agreement that certain information or property is to be kept confidential, and treated as confidential, by whomever has access to the information.

A confidentiality agreement is a contract, agreed to as between two parties. That means that as long as the parties agree that X, Y, and Z are confidential and should be treated as such, then a court will honor and enforce the confidentiality agreement.

There is no need, with a confidentiality agreement, to prove that information is, in fact, a legal trade secret, or that it qualifies as a trade secret. And although many confidentiality agreements include the agreement to keep trade secrets private, they don’t always, and they don’t have to be. Parties can legally agree to keep confidential information private that wouldn’t ordinarily qualify as a legal trade secret.

What About Trade Secrets?

Let’s look at the reverse question: Can you protect a trade secret-for example, keep someone from disseminating, using, or disclosing information or data–even if there is no confidentiality agreement signed by the parties?

The answer is yes. Florida’s definition of what and what is not a trade secret doesn’t specifically say that to be considered a trade secret, the data or information must be subject to any confidentiality agreement. So long as whatever information sought to be protected qualifies, it will be and can be enforced as a trade secret in court.

Did You Consider Information a Trade Secret?

Except that there is one caveat: One thing that courts look at to see if information is a trade secret or not is what steps the owner of the information (the parties seeking to keep the information private) took to protect and preserve the trade secret.

Put another way: A court won’t protect your valuable and private trade secrets unless you can show that you actually treated your information as private and confidential. And part of the way you do that, is by using confidentiality agreements.

That means your lack of having or using a confidentiality agreement could be used against you in court if you are trying to preserve, protect or enforce your trade secrets. A court could ask why, if information is supposedly such a trade secret, you didn’t take steps to protect that information by using a confidentiality agreement.

That means that if you are dealing with what you consider to be trade secrets, confidentiality agreements are valuable tools for you, should you ever have to demonstrate to a court that the information you are protecting is in fact private and a trade secret.

Need help protecting your sensitive trade secrets and company data? Let the West Palm Beach commercial litigation attorneys at Pike & Lustig help you.

Source:

leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0600-0699/0688/0688.html