Given the impact of technology on the modern lifestyle, it would be difficult for the emerging generation to imagine a world without it. To think that tech life staples such as Facebook, YouTube and Twitter were founded little over a decade ago (and didn’t become mainstream until much later) is astounding, given the social reliance we place on these tools to live our everyday lives. The arrival of social media has also meant that people no longer spend only their working hours online but that they now spend a large majority of their personal time socialising, shopping, banking or browsing online. This major shift in society also means that there are exponentially increasing amounts of sensitive data (in the form of information technology, emails and systems) being transmitted and stored online in the ordinary course of business. Such information, technology and systems of a business (also known as Intellectual Property (IP)) is often commercially sensitive and confidential material which now requires mechanisms of protection that are reflective of our technology-based society. There are various ways to safeguard your IP depending on its nature.
Trademarks
A trademark registration gives you exclusive rights to commercially use, sell or license your trademark (e.g. a logo, a business name, a picture or combination of both). It is a way to distinguish your business identity from that of competitors and registration stops anyone from using your trademark or a trademark similar to yours. An Australian trademark registration provides the registered owner with the right to use the trademark in Australia for a period of 10 years (with the possibility for it to be renewed indefinitely). The value of your trademark is obviously tied to the success of your company. For this reason, your trademark is an important element of your business identity and a crucial marketing tool which requires the protection of laws making it an offense for third parties to use your trademark without your permission.
Confidential information and confidentiality agreements
A confidentiality agreement is a legally binding contract preventing the disclosure of information designated as confidential exchanged between parties. Such an agreement is commonly used by businesses seeking to have open discussions with prospective business partners about new or existing ideas. Confidentiality clauses in contracts (e.g. employment agreements and other commercial contracts) are also included to safeguard confidential information by imposing restraints on the use and disclosure of that information. By having a confidentiality agreement (or confidentiality clause in an agreement you enter into), persons who are in receipt of your sensitive business information (including employees, business partners, commercial business associates etc.) can be held to account in the event that they wrongly disclose or use information that belongs to your business.
Dealing with outgoing employees
A further prudent step is to confirm an employee’s obligation of confidentiality in each employee’s employment contract. Employees and other members of your business have general law duties not to inappropriately disclose or use any confidential information during or after their employment. It is therefore of utmost importance that such clauses are included in your business contracts to minimise the risk of misuse of information by an employee. It is also useful to remember that not all employees need access to confidential or sensitive information in order to perform their role, so confining access to such information on a need-to-know basis can further ensure that your intellectual property and confidential information is kept secure.
As mentioned above, it is imperative that you impose restrictions on the use of your IP by outgoing employees (the risk of course being that they give your confidential business information to a competitor with whom they have taken up employment). The most common way of doing this is to have a combined restraint of trade and confidentiality clauses preventing outgoing employees engaging in direct competition with you or using information which they acquired during the course of their employment either in setting up a new business of their own or in conjunction with a new employer.
Lesson learnt In this information technology dominated environment it is now more important than ever that businesses take measures to safeguard their intellectual property. This is particularly so given the ease with which data can be transferred.