Trust is not confidentiality

Published onMay 2015

In the business world, trust does not mean confidentiality. And being overconfident in business relationships may have irreparable consequences, especially as far as intellectual property rights are concerned.

That is what the owners of a European patent and a French patent have just learnt before the French courts (1). After one of their business partners decided to end their collaboration, they filed a patent infringement lawsuit seeking a cease-and-desist order. The defendant replied by requesting cancellation of the patents for lack of novelty, more precisely for being made available to him as a client, and consequently to the public, before the date of filing of the patent applications (2).

As a matter of fact, the patent owners had sent prototypes to their business partner well before the dates the patent applications were filed and said prototypes were fully disclosing the content of the principal claims of the subsequently filed and registered patents. Their argument according to which the communication of the prototypes to their client were confidential and covered by a non-disclosure agreement did not convince the courts since no evidence could be put forward.

Actually although there had been a non-disclosure agreement between the parties, it was related to a former prototype and a different invention. But there was no such confidentiality provision on the documents given to the client in connection with the new prototypes (3). Moreover, according to the courts, the existence of established relationships between the parties is not sufficient to impose a non-disclosure obligation on one of them.

Whatever good business relationships one may have with other parties, a non-disclosure agreement or at least a confidentiality clause must never be overlooked.

© INSCRIPTA

(1) French Cour de cassation, Commercial chamber, 17 March 2015 (case No. K/2013/15862) and Court of Appeals of Paris, Section 5, 1st chamber, 12 December 2012 (case No. 2010/19186).

(2) On the grounds of Articles L.611-10 and L.611-11 of the French Intellectual Property Code.

(3) Although there were a claim of ownership and a clause prohibiting any reproduction on said documents.