Confidentiality Agreements: What, When, Why and How to Stay out of Trouble

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Confidentiality AgreementsWhat, When, Why and
How to Stay out of Trouble

• Carl Mahler
• Innovation Transfer Center

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Whats the Worst that can Happen?

• Petr Taborski, student (and employee) at the
  University of South Florida
• Did work in USF lab on his own time
• Neither USF nor the sponsor wanted his results
• Took his five lab notebooks, applied for a patent
• Result?

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18 Months in Jail, 2 on Chain Gang
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Why?

• Violation of confidentiality
• Court found that the notebooks Taborski took were
  USFs trade secrets
• USF sued Taborski (and he patented after a judge
  told him NOT to)
• Note USFs Actions are NOT typical of academia!

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Culture Clash Corporations vs. Academia

• Academia exists to create and disseminate
  knowledge
• Companies exist to make money
• Making money often entails keeping secrets
• Companies pay universities to do research
• How do we resolve these conflicting goals?

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Confidentiality Agreements

• Legal agreements (contracts) governing the
  exchange and use of confidential information
• Should be in writing
• Often essential in laying the groundwork for how
  a company and a university interact

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What Are They?

• Can be stand alone agreements or part of other
  agreement
• Sponsored Research Agreements
• Material Transfer Agreements
• Consortium Agreements
• Can govern one-way or two-way transfer of
  information
• Have at least two parties, maybe more

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When Do You Need Them?

• Whenever
• You want to receive confidential information
• You want to share your confidential information
• You want to transfer someone elses confidential
  information
• Put them in place BEFORE you give or receive the
  information!

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Why do you Need Them?

• So you can receive information
• So information can be controlled appropriately
• To ensure that you can publish research results
• To prevent loss of patent rights

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What Should It Include?

• Description of what is covered
• Statement of why the information is being shared
• Marking provisions (and provisions for disclosing
  orally or visually)
• Two time periods
• Period during which information will be shared
• Period of confidentiality

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What Should It Include II

• Identify who is covered by the agreement
• Employees? Consultants? Students?
• Does everyone who receives information have to
  sign an agreement?
• Does the agreement cover everyone who needs to
  know the information?
• Standard of Care

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What Should It Include III

• Exceptions to confidentiality for
• Information you already know
• Information that becomes commonly known
• Information that is later given to you by a third
  party NOT under confidentiality obligations
• Information that must be disclosed according to a
  court order or other governmental regulation
• Consider getting rights to injunctions

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Frequently Requested Unacceptable Terms

• Warranting that CMU owns information or has a
  right to disclose it.
• Warranting that information is correct, complete,
  and accurate
• Indemnifying the recipient for all losses
• Ownership of intellectual property based on
  confidential information

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Other Considerations

• If you work with Nike today, dont expect to work
  with Adidas tomorrow
• How do you keep from inadvertently using Company
  Xs information when working with Company Y?
• Protect your ability to publish

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Who Can Sign?

• Probably the most frequently made mistake
• Very few people can bind the university
• Who is at risk for agreements you sign?
• What happens if the agreement you sign is
  breached?

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You Get a New Roommate!
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• The End
• Questions?