Confidentiality tips for your startup ideas
Updated: 8 December 2019
You don't always need a confidentiality deed or NDA for your startup. Advisors have certain obligations to keep your information confidential. For others, it may be appropriate to use a confidentiality deed.
Short on time? check out our summary video below.
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.
2. Lawyers & patent attorneys
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.
3. Everyone else
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.
4. Confidentiality deed or non disclosure agreement?
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 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 before you share your ideas.
5. Useful contacts & resources
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.
- CPA: CPA Australia, General Manager, Professional Conduct Locked Bag 23 Grosvenor Place NSW Australia 1220, email@example.com.
- Chartered Accountants: Senior Advisor Professional Conduct, Institute of Chartered Accountants Australia GPO Box 9985 Sydney NSW 2001 firstname.lastname@example.org
- Lawyers: Office of the Legal Services Commissioner, Level 9 , 75 Castlereagh Street Sydney NSW 2000 Free call: 1800 242 958, email@example.com
- Patent Attorneys: Professional Standards Board for Patent & Trademark Attorneys, The Secretary Professional Standards Board for Patent and Trade Marks Attorneys PO Box 200 WODEN ACT 2606
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 have any comments or questions about sharing your ideas? Be sure to leave them below.
I wish you success in your ventures!