Q: I was sent a confidentiality agreement but I never signed it.  I then worked with the man who had sent the information and now would like to move forward without him but using the information.  Am I free to do so?

 

A: No.  Under the law of confidence an obligation of confidentiality can be imposed by a written contract but also by a verbal indication too, and by certain relationships such as between solicitor and client, employer and employee, etc.

Here the person passing on the information told you it was secret.  You did not sign the agreement but nor did you say "I am not prepared to receive any confidential information."  Check whether you rejected the obligation of confidence and despite that he still handed you the information.  Assuming you did not, the fact that the agreement is unsigned does not mean he cannot sue you for breach of confidence if you act in breach of the agreement.  In some countries agreements must be signed, but not in the UK.

Contracts can be made verbally.  That is not to say that it is wise just to impose confidentiality obligations verbally to avoid the hassle of negotiating a contract.  It is much easier to prove an obligation of confidence if an agreement is signed.

Inventors Legal Problems

Related further reading by Susan Singleton...

Further Reading:

Editors Note: These articles first appeared as Susan Singleton's very popular column in Inventors World magazine.

 

Due to the changing nature of the law, Susan has fully updated them for 2015.

Part #11

For more Inventors' Legal Problems go to:

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Q: I am a full-time employee with a well-known plc.  I have been making an invention in my own time at home in the garage and now wish to exploit it.  Does my employment status affect the invention and my rights to it?

 

A:  Read your employment contract.  Some employment contracts prohibit the employee from taking a second job or even being involved in another business.  Other employment contracts contain no such restriction.  Check the wording of the restriction carefully too because it may allow you to mess around in the garage inventing, but not to move things on to the exploitation phase.

Even if there is no express restriction in your contract you will owe a duty of good faith to your employer which would stop you competing with the employer.  If you are inventing by day for your employer and at home working on a similar device you are likely to find that the employer owns all the rights.  It does not matter where you do the work or who pays for the tools which are used.

If the invention is part of your work or made in the course of your employment then the employer will own the intellectual property rights in it. It may be wise to consult a solicitor.

Q: What is 'knowhow' and how is it protected from a legal point of view?

 

A: Knowhow is a body of technical information.  It is usually secret and therefore protected by the laws of confidentiality.

Often it consists of drawings (which may in themselves be protected by copyright), and instructions as to how to build a product, recipes or formulae.  It is wise to include the words "copyright-name-date-confidential" though this is not a legal requirement in order to obtain protection.

You may choose to patent your inventions but there is likely to be a large body of additional knowhow which goes with the invention, but is not part of the patent.  In addition you may help others, such as your licensees, exploit your knowhow, by visiting their premises and showing them how to manufacture. This may be called 'showhow'.  It is likely also to be confidential information.

However, a word of warning - it is very easy for information to lose its status of 'confidence'.  Obviously publication can jeopardise rights, but so might showing at a trade fair or hawking the information around potential licensees if they do not sign confidentiality agreements.

When you draw up secrecy agreements there are two main elements - an obligation to keep the information secret and the purpose for which it may be used.

Do not be fobbed-off with a contract which provides that the information is not confidential after a very short period.  You should obtain protection for decades not one or two years.

 

Be aware that in 2015 the EU is likely to finalise its draft EU law/directive on trade secrets - see http://ec.europa.eu/internal_market/iprenforcement/trade_secrets/index_en.htm.

Q: l have pushed my invention through to production stage, in a very small way.

 

It is the sort of product which will be sold in small shops, and I am about to appoint an agent to market it.  This is someone I have known for a long time.  He is a very good salesman and this product will fit nicely into the range of products he markets. What is the law in this area?

 

A: Whether he has a written contract or not the Commercial Agents (Council Directive) Regulations 1993 give the agent certain rights and duties.  In particular, he is entitled to commission on the sales he makes in his area.

He is entitled to a fixed period of notice if you want to get rid of him later, which rises to three months after the second year.  If you terminate his agency, or he dies, or becomes too ill to carry on, you are obliged to pay him compensation.

This may be as much as a year's commission or more, so beware of the risks of appointing an agent in the first place.  If he is your employee that does not apply but then he would have protected employment rights.  You cannot exclude the right to compensation in the contract, but having a written contract allows you to keep a proper check on the agent and impose commercial requirements (such as minimum sales figures) on him or her.  If he is in breach of contract you do not have to pay compensation.

 

See the writer's book Commercial Agency Agreements - Law and Practice, Susan Singleton, Bloomsbury, 4th edition 2015 for further details in this area - http://www.bloomsburyprofessional.com/uk/commercial-agency-agreements-law-and-practice-9781780434834/

Q: l cannot afford to pay for protection for my invention.  Can I just say it is patented when it isn't?  I have seen statements like 'patent applied for' on goods.

 

A: No.  If you do, you could be sued.  It is an offence under most intellectual property laws to claim an invention is patented or a registered trademark when it is not.  You should not put that a patent or registered design has been applied for unless it has.  With trademarks the letters TM can be used where you are claiming unregistered rights or rights in an application, but the symbol  ®  may only be used for registered trademarks.