Recently, the Seventh Court of Appeals handled a case (nClosures, Inc. v. Block & Co.) involving a confidentiality agreement between a supplier and a manufacturer. In this case, the court chose to follow the agreement laws applied by Illinois, ruling that because nClosures had not taken any additional protective measures beyond the confidentiality agreement to keep its unique product idea private, Block had not violated the agreement by producing a competing market product...
Further protections may have included:
- Entering into specific confidentiality agreements with all those working on the manufacturing of the cases
- Marking blueprints, patterns and test items as confidential during mail transmissions and business meetings
- Limiting accessibility to the design of the cover
- Taking steps to keep mailings and testings confidential
As a result of not taking further precautions, nClosure lost its case. The case clearly demonstrates that a signature on a document is not sufficient protection for a valuable product idea. Responsibility and caution must be maintained throughout the period of the contract, and any additional protective steps should be taken.
What does this mean for me as a contractor, supplier or business partner?
- Make sure that you understand all the terms of the confidentiality agreement, specifically those regarding your intellectual property. At Heins Law Office, our experienced employment law attorneys regularly review confidentiality agreements, ensuring that those involved understand what they are signing and are aware of the situations in which the agreement will apply.
- Know those who will have access to your blueprints, ideas, designs, and any other confidential items. Include confidentiality agreements for these individuals directly (by name or position) within the agreement, or within a separate agreement.
- During business meetings and presentations, make sure that only authorized people are present and taking notes.
- During mailings and testing periods, keep electronic passwords on all documents and locks on all testing products. Limit the amount of staff who can access the documents and products.
- Mark all products, documents, papers, and emails involved in the transaction and business work as confidential. Limit access to these items both among your staff members and also among the staff of the other company.
By Anna Witan
Source: Mondaq Law Articles