Risk: Disclosure of confidential information (trade-secrets) in co-working space
Co-working spaces are hubs of knowledge transfer and innovation, attracting business owners that are idea makers. Yet, transfer of ideas may have potential to disclose trade secrets in certain opening workspaces.
Trade Secrets and Confidential Information Liability
Currently, there is no system for registration of trade secrets and confidential information in Hong Kong.
Under the common law principles of breach of confidence, the unauthorised disclosure of trade secrets can be considered as a breach of the duty of confidence owed to the trade secret owner.
- The information must have the necessary quality of confidence
- The information must have been imparted in circumstances importing an obligation of confidence; and
- There must be an unauthorised use of the information to the detriment of the party communicating it.
If a breach of confidence is established, the trade secret owner may be entitled to remedies such as injunctions, compensatory damages, account of profits or destruction of the confidential information.
Mitigation Solutions
As a coworking space operator, one should have the responsibility to protect the confidentiality of all members’ personal or commercial information. Below are some methods Operator can take to minimise the risk of trade secrets in coworking space:
Non-Disclosure Agreements (NDAs)
- Encourage members to utilise NDAs when sharing sensitive information with others within the coworking space
- Offer templates or resources to facilitate different members’ uses
Digital Security Measures
- Ensure there are secure Wi-Fi networks, password-protected access to shared resources, and encryption protocols for some sensitive data
Establishment of Confidential Meeting Rooms
- Designate and provide private meeting rooms
- For conducting confidential discussions without the risk of being overheard and disclosed
Data Protection and Compliance
- Comply with applicable data protection and privacy laws, namely the Personal Data (Privacy) Ordinance (Cap.486)
- When collecting personal data for processing, the Operator should implement appropriate data protection measures and users should obtain respective consents from others
Collaboration guidelines:
- Establish guidelines for collaborative activities within the space
- Ensure all members understand how to handle trade secrets when working with others
READY?
Looking to safeguard your legal responsibilities? Utilise our Coworking Contract Generator for added assurance!