All confidential information used while developing a business concerns that arising from investments in research or mere happenstance, giving its holders competitive advantages over their competitors, when kept undisclosed. Therefore, such information may easily be considered the lifeblood of a business.
In order to keep this sensitive data properly protected, the company in possession of confidential information must take conscientious measures to keep it secret by preventing access to it. However, common knowledge information or that easily recognizable by anyone in the line of business, developed in an independent manner, or info disclosed by a court order, are not protected.
Brazilian Law does not have specific codes for confidential information. However, the matter is widely and fairly covered by the Brazilian Federal Constitution (CF), the Industrial Property Law (LPI) and the Consolidation of Brazilian Labor Laws (CLT).
The Industrial Property Law (LPI) assures that whoever uses fraudulent means to gain clients or uses and/or discloses unauthorized information, material or classified data, illegally obtained or not, shall be considered guilty of unfair competition, subject to penalties.
The Consolidation of Brazilian Labor Laws (CLT) considers the violation of trade secrets reason enough for dismissal for due cause. Jurisprudence frequently ensures that this directive is made effective.
This is also a recurring theme in the Consumer Protection Code (Código de Defesa do Consumidor), the Civil Code (Código Civil) and in laws of more limited application such as the National Security Law (Lei de Segurança Nacional), the Law on Access to Public Information (Lei de Acesso à Informação Pública) and the Software Protection Law (Lei de Software).
All provisions come together to protect the legality, legitimacy and ethics of business conduct and competition for all market players.
Nevertheless, bear in mind that once confidential information is disclosed, the confidentiality is lost, regardless of possible future compensation, plus patents are made public after 20 years. Therefore the use of NDA (Non-Disclosure Agreement) is highly advisable, as well as further protection measures: passwords, restricted access, etc.
These contracts determine which information or material the parts shall consider confidential, how to label such information in order to assure confidentiality, how long confidentiality shall be kept and penalties in case of violation; also an additional instrument of non-competition rules is usually included.
Juliana G. Meyer Gottardi is partner at Pacheco Neto Sanden Teisseire Law Firm.