Confidentiality agreements and how they safeguard collaborative research

Confidentiality agreements in collaborative research are vital, particularly in public-private partnerships. They ensure that sensitive data is protected, and access is controlled. This is particularly relevant in large, multi-institutional projects funded by science councils. Clear agreements on data usage and sharing are critical. They help researchers to manage differing expectations and safeguard outputs 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. Disagreement about how data is used can lead to challenges. This includes, for example, not being able to publish results. However, it can also include having results published when researchers do not want them to be. Confidentiality agreements help to safeguard against these types of issues.

See Why confidentiality in collaborative research matters.

What are confidentiality agreements?

The SGCI guide gives a concrete description of a confidentiality agreement. It describes it as a legal contract between parties. The confidentiality agreement is also known as a non-disclosure agreement. This contract is drawn up when researchers wish to share certain information with each other. It binds the recipient of the information against disclosure of it to another party. It also prevents the use of the information in a detrimental way. That is to say, in a way that would harm one or more of the parties.

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

• Identification of the parties. This includes other third parties that may also be party to the agreement. For example, it might include related or affiliated organizations.
• The definition of what is deemed to be confidential. For example, is it any information or only that which is marked as confidential? Does it include spoken information?

Why are confidentiality agreements necessary?

A confidentiality agreement is essential for protecting information that is not publicly available. Many different types of information can be very valuable to an organization. This includes commercially sensitive data and proprietary inventions not yet patented or published. It can include trade secrets and valuable know-how. This knowledge could be experimental techniques, formulae, chemical structures or source code. A confidentiality agreement helps to prevent unauthorized disclosure. It protects a company’s business, reputation and intellectual assets from potential harm or 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

A confidentiality agreement is commonly applied when organizations or individuals explore potential business or research collaborations. This work might involve sensitive processes, particularly for evaluating commercially viable technologies. The agreements protect confidential information, such as trade secrets or proprietary research, from being disclosed or misused.

Employees are often required to sign non-disclosure agreements to safeguard their employer’s trade secrets. Furthermore, employment contracts may restrict the use of such information. In unavoidable cases of disclosure, the receiving party must maintain secrecy and avoid improper use. This might include using the information for unrelated projects without consent.

A confidentiality agreement might include restrictions on disclosing or using confidential information. This might occur during or after a project, consultancy or employment. For instance, software developers at a company can be bound by an agreement to protect the source code from competitors. Non-disclosure agreements are also necessary when pitching inventions. They can also be applied when 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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