In some business segments, data confidentiality is as important as the quality of the product or service, market share or financial result. Sometimes the vision of the each business development is based precisely on establishing the confidentiality of business data or trade secret, where the future of the business relies on this method. Some of the large companies choose to keep recipes, software codes, industrial solutions, etc. precisely through the institute of trade secrets, i.e. by concluding strict NDA contracts, rather than through patent protection, which is time limited. Certainly, before engaging in any legal relationship with a third party, whether it is by an employment contract, a service contract or a consulting or business-technical cooperation contract, it is important to protect your business data and business visions in a way that they don’t become publicly available. NDA contracts have proven to be a pretty effective model for protecting the mentioned data, assuming that they are drafted properly and that they prescribe sufficiently high fees for their breach, which can have preventive effect on the contracting parties.
First of all, it is important to define a trade secret and a confidential data, their legal treatment and the contractual approach they imply, as well as the relationship between trade secrets and unfair market competition, and all the possibilities that the law and practice have to offer in this regard.
When concluding a confidentiality agreement / NDA contract, or implementing NDA clauses into existing contracts, it is very important to anticipate all the necessary elements, including the possibility of implementing contractual penalty. Often, the way the contract is tailored predetermines the possibility of subsequently exercising the right to compensation for any possible damages.