Business principals in any commercial entity who have worked hard to grow their company and ensure its lasting viability obviously have a lot of internal data, processes, know-how and other proprietary information that they seek to jealously safeguard and protect.
And that concern assumes heightened importance in any instance where they share confidential company information with a third party - sometimes a business competitor - for various purposes.
Those purposes can be many. Maybe a business is scouting out a consultancy firm that needs access to key company data to properly do its job. Perhaps a joint venture with a business rival is being contemplated, which necessitates the sharing of key information. Or maybe it's the case that the purchase or sale of business interests are in play, with several outside groups needing internal data to make informed decisions.
A company will want to effectively identify and protect confidential information under all those scenarios, of course, and will look to a closely tailored and well drafted nondisclosure agreement to ensure that objective.
For obvious reasons, the degree to which the goal is achieved will depend on the quality of the agreement. And that close tie, as we noted in our September 13 blog post at Rich Michaelson Magaliff Moser, LLP, is what strongly supports the decision of many business principals to solicit help from a proven commercial law firm that routinely represents diverse business clientele across a wide universe of complex matters.
When it comes to fully identifying confidential data and seeking to adequately safeguard it from infringement when it is purposefully shared with third parties for business reasons, it is an obvious imperative that the job be done right.
As a commentator on NDAs notes in a recent deep-dive article on the subject matter, "provisions [applicable to a confidentiality agreement] are extremely important and worthy of detailed review."
Absent that, critically important proprietary data and related information could be compromised.