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It is in your business’ interests to avoid the public disclosure of commercially confidential information by others. Publicising such information can give your competitors an advantage and subject business information to public scrutiny. Labelling information ‘commercial in confidence’ can protect your business, especially when used alongside confidentiality clauses. This article will explain the benefits of protecting confidential information so your business can avoid this information becoming public.
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What Information is ‘Commercial in Confidence’?
Your business can protect confidential information. Put broadly, confidential information is data that is unique to the company, commercially sensitive and not already publicly accessible.
Each has a unique legal meaning, so let us explore them below.
Intellectual Property Rights (‘IP’)
IP includes your business’ trade marks, patents or designs. If you run a Formula One racing team, the components and liquids used within your successful engine may not be secret (such as the brand of oil used and the shape of the engine casing). However, the way the parts fit together and the precise design of the internal components might be.
This would be the same as an award-winning chef publicly disclosing the ingredients to their famous, unique dish but protecting the recipe itself. This is because it is the exact amounts, times and method of cooking that sets the dish apart.
Trade Secrets
Trade secrets refer to secret company information. As per the chef example above, a trade secret is likely to be any ‘secret ingredient’ that makes a dish unique and offers a competitive edge over similar dishes. The ingredient itself may not be particularly secret, but the proportions and method used may be unique.
Similarly, whilst your business may publish financial information each year that contains annual profit, it is likely to treat the profit margin per client (and sometimes the identities of their clients) as a trade secret.
Commercially Sensitive Information
Examples of commercially sensitive information include:
- tender documents;
- spreadsheets calculating the financial impact of a potential redundancy process; or
- emails threatening the company with a legal claim.
This information demonstrates why and how a company makes a profit (or loss). Furthermore, it may inform rival companies on how to damage your business.
How Do I Protect Confidential Information?
Primarily, your business should have staff sign a confidentiality agreement upon starting employment at your company. This agreement can ban the unauthorised use of commercially sensitive data.
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What if Someone Discloses Commercial Information?
If that person has previously signed a contract stating they will not disclose confidential information, they will breach their contract. Thus, your first step should be to obtain legal advice and send a letter warning them against future breaches or threatening an injunction against disclosing certain information further. An injunction can be expensive, so it is worth exploring other routes first.
Alternatively, if that person or company has not previously signed a written agreement, your options may be more limited, and you should swiftly obtain expert legal advice.
Naturally, it is worth being aware that there is a potential whistleblowing exemption for staff members seeking to bring illegal acts to the attention of others. You should obtain legal advice upon hearing of a staff member’s disclosure of confidential information under the reason of ‘whistleblowing’.
Key Takeaways
In summary, leaking confidential information can cause various issues for your business. Labelling certain information ‘commercial in confidence’ is an excellent first step. Doing so enables you to threaten legal action if a person or company attempts to disclose your confidential information to someone outside your company. Furthermore, to truly protect your business, you should accompany this with a confidentiality agreement.
If you need help protecting your confidential information, our experienced contract lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 0808 196 8584 or visit our membership page.
Frequently Asked Questions
It is usually as simple as listing all the people who have access to the information and going from there. If a rival company appears to know your trade secrets, it would be natural to look at any individual who has recently started working there.
Most companies will obtain specialist legal advice and consider contacting the individual to warn of legal consequences if they continue.
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