In some situations like when working you are working with advisors, there are rules they must follow when handling your confidential information and you are entitled to complain about any breaches.
As for the other people you choose to disclose your idea to, a confidentiality deed may be suitable.
Accountants must keep your information confidential because they are bound by a code of ethics.
Accountants must respect the confidentiality of information acquired through professional or business relationships and not disclose that information without your proper or specific authority or use that information for theirs or another person’s advantage.
The exception to this rule is if there is a professional or legal right or duty to disclose.
Similarly, both lawyers and patent attorneys have an obligation not to disclose your ideas to others.
Patent Attorney’s must abide by the Code of Conduct for Patent and Trademark Attorneys 2013 and must not use client information for their own benefit or for the benefit of another person.
Lawyers must abide by the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 and cannot not disclose your information to anyone else unless they have your specific permission or are otherwise legally permitted or compelled by law.
While many other professions have rules of conduct that address non disclosure of client information, you should be careful when you are talking to other people about your startup idea.
It’s a good idea to obtain a signed confidentiality deed before you share your ideas.
A Confidentiality Deed is usually inexpensive and can protect your valuable business ideas.
The term that you are most likely used to is Non Disclosure Agreement or NDA however it may make more sense to have a confidentiality deed drawn up instead.
For a confidentiality agreement to be valid, money must change hands. If you are meeting a possible business partner for the first time it is unlikely that money will change hands so in this case a confidentiality deed is suitable before you share your business ideas.
Money does not need to change hands for a deed to be enforceable.
You have 12 years to make a claim for a breach of your confidentiality deed in most states including New South Wales but only 6 years to take action for a breach of your confidentiality agreement.
In South Australia and Victoria you have 15 years to enforce a deed.
What happens if you use an agreement incorrectly? i.e. at a first meeting with a prospective business partner when money did not change hands?
If you use a confidentiality agreement deed instead of a deed when money did not change hands, it may not be enforceable.
If in doubt, it's a good idea to get professional advice.
For useful information about your intellectual property (IP) rights generally, see IP Australia’s website: IP Australia.
Below are some useful contacts for lodging a complaint for a breach of confidentiality against an advisor.
If someone other than an advisor has breached confidentiality terms, you may have some legal options. It's a good idea to discuss these with a lawyer.
Advisors - you can share your ideas freely with advisers such as accountants and lawyers because they are bound by rules of confidentiality
Everyone else - you may wish to consider a confidentiality deed when sharing your business ideas with others
Breach - if there has been a breach of your confidentiality by an advisor you can talk to the appropriate professional regulatory body, for breaches by others, you can discuss your options with a lawyer.
Do you need help from an Australian business lawyer for startups? Contact us today for help on firstname.lastname@example.org or 1300 478 278 Australia wide or on +61 2 9151 7233 from overseas. We are always glad to help.
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