Confidentiality agreements and how they safeguard collaborative research

Confidentiality agreements in collaborative research are vital, particularly in public-private partnerships. They actively protect sensitive data and control access. This is particularly relevant in large, multi-institutional projects funded by science councils. Establishing clear agreements on data usage and sharing is critical. These agreements allow researchers to manage differing expectations and safeguard outputs more effectively.

In 2020, the Science Granting Councils Initiative published a technical guide on confidentiality. This handy resource specifically considers confidentially agreements and why they matter. The guide also contains useful information on intellectual property (IP) ownership and data sharing. It looks at public interest and industrial needs and how they might conflict. Disagreements over data usage can create significant challenges, including restrictions on publishing results or the unwanted release of findings. By establishing clear terms, confidentiality agreements prevent these types of issues.

See why confidentiality in collaborative research matters.

What are confidentiality agreements?

The SGCI guide clearly defines a confidentiality agreement as a legal contract between parties. Also known as a non-disclosure agreement, this contract formalises how researchers will share certain information. It legally binds the recipient from disclosing the information to a third party or using it in a harmful way. In essence, it prohibits any action that could harm the involved parties.

The guide highlights some important features of a confidentiality agreement such as:

• Identifying all parties involved, including third parties like affiliated organisations.
• Defining what constitutes confidential information. For example, does this include all information or only that which is marked as confidential? Does it cover verbal communication?

Why are confidentiality agreements necessary?

A confidentiality agreement plays a crucial role in protecting information that is not publicly available. Many forms of data are extremely valuable to organisations. This includes commercially sensitive data and proprietary inventions not yet patented or published. It can include trade secrets and valuable know-how, such as experimental techniques, formulae, chemical structures, or source code. A confidentiality agreement blocks unauthorised disclosure and shields a company’s business, reputation, and intellectual assets from misuse.

The guide also highlights another important detail. Any data compiled during research projects might be protected as confidential information. In this case, confidentiality agreements are essential. Employees should be made aware of this and included in the agreement. Confidentiality agreements are also important for collaborative research. This is in case they need to share unpublished research findings, data, materials and tools. This ensures that confidential information is not publicly shared without the agreed procedures.

When to apply confidentiality agreements

Organisations or individuals typically use confidentiality agreements when exploring potential business or research collaborations. These arrangements often involve sensitive processes, especially when evaluating commercially viable technologies. The agreements ensure confidential information, including trade secrets or proprietary research, is not disclosed or misused.

Employers often require employees to sign non-disclosure agreements to protect trade secrets. Furthermore, employment contracts may limit how that information is used. In rare cases where disclosure is unavoidable, the receiving party must protect the information and avoid using it improperly. For example, they must not use it for unrelated projects without consent.

A confidentiality agreement might enforce restrictions during or after a project, consultancy, or employment. For instance, software developers can be bound by such agreements to protect source code from competitors. Non-disclosure agreements are also essential when pitching inventions or testing new products.

Confidentiality agreements: A case study

The application of confidentiality agreements can protect data from misuse. The Vestergaard Frandsen vs. Bestnet Europe is a case in point. This involved a dispute over the misuse of confidential information around insecticidal mosquito nets. Trine Sig and Torben Larsen were employees of Vestergaard but left the company. Together with a former consultant, Dr. Ole Skovmand, they formed Intection. This new company developed competing mosquito nets under the name Netprotect. Dr. Skovmand assisted in the development of Netprotect using Vestergaard’s confidential techniques. Vestergaard sued Intection in Denmark, but Sig resigned, and the company ceased operations.

However, Bestnet Europe was then formed in England. It continued the same business. Vestergaard pursued legal action in the UK against Bestnet, Larsen, Sig and Skovmand for misuse of trade secrets. The court found Bestnet, Larsen and Skovmand liable for breaching Vestergaard’s confidentiality. Sig was cleared. Bestnet was ordered to pay Vestergaard legal costs of £4.5 million. It also had to pay an additional £1.5 million in interim payments. Vestergaard also brought legal action in another five countries against Bestnet and Intection.

And finally

The SGCI technical guide highlights many important points. The main takeaway is that confidentiality agreements are an important part of collaborative research. Furthermore, they form a critical element of an overall IP strategy. The agreements can give companies and their employees protection from data breaches and misuse. For Science Granting Councils, this knowledge can make collaborative research more straightforward. Where many partners work together, confidentiality is key.

For more information, read Confidentiality in collaborative research: Why should Science Grating Councils care?

Learn more about the Science Grating Councils Initiative here.

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