Protecting your business information
Information is one of a business’s greatest assets. There are lots of reasons to keep certain information confidential and they are largely based on the financial integrity interests of the business.
Knowing how the product is priced, who the suppliers are, who the customers are, how the product or service is created etc. can all be vital to the financial integrity of the business.
There are four types of information:
- Public information – this is information that is in the public domain and can be accessed on a non-confidential basis. For example the information about your company that is filed with Companies House – who your shareholders are, who your directors are, your annual accounts. You cannot generally protect this – its already out there for the world to know.
- Knowledge and skill – this is information that a person picks up “on the job” which is confidential but its in their head just by virtue of being used. For example an engineer uses a method of repairing a machine that is only known by your business but because they are regularly carrying out your process its in their head and they would naturally take it with them if they left.
- Mere Confidential Information – this is confidential information which is more easily protected. Employees only have a duty to keep mere confidential information, confidential during their employment so you should consider including specific confidentiality clauses in their contracts of employment so the information is protected post-employment too.
- Trade Secrets – “Need to Know” “For your eyes only!” – the most confidential of confidential information.
That is why it is very important to protect that information. There are some practical steps you ought to take such as password protecting confidential information, restricting access to only those who need to know, and actually marking it as “confidential”. All of these steps practically demonstrate you value the information and are serious about its protection.
You would find it very difficult to argue that information should be classified as a Trade Secret if you leave it lying around the office (or server) for anyone to read, copy, access or take.
The big danger areas arise when that information has to be shared. That is where contractual safeguards can assist. There is merit in having in place a non-disclosure agreement at the point that negotiations begin. It can be hard to evaluate whether a commercial relationship will work without sharing some information.
The commercial relationship may generate information which needs to be protected, either because a consultant is advising and making recommendations or the research and development is identifying new product or service methodologies, new market data etc. It’s important therefore to also ensure that there are appropriate confidentiality protections in your terms and conditions.
The timing of the protection can also be crucial. Most confidential information has a shelf life – marketing strategies or pricing information may become obsolete after 12 months. Other information may need to remain confidential forever – the secret recipe for KFC or Coca Cola for example. It’s important that any protections put in place, are in place for a sufficient period to provide the necessary protection.
Contact Thursfields
Our Commercial Team can assist you in protecting one of your most valuable assets. For more information contact Hannah Clark on 0345 20 73 72 8 or email info@thursfields.co.uk.
