Ukrainian case law regarding confidentiality agreements (+ Templates of confidentiality and non-disclosure agreements (bilateral and unilateral exchange), Non-disclosure agreement, Mutual nondisclosure)

Restricted information
Restricted information is confidential, secret, and official information.
Confidential information is information about a natural person, information to which access is limited to a natural or legal person, except for subjects of authority, as well as information recognized as such on the basis of the law. Confidential information may be distributed at the request (consent) of the relevant person in the order determined by him, in accordance with the conditions provided by him, unless otherwise established by law.
Relations related to the legal regime of confidential information are regulated by law. ( Article 21 of the Law on Information ).
Information related to the production, technology, management, financial and other activities of a business entity, which is not a state secret, the disclosure of which may harm the interests of the business entity, may be recognized as its commercial secret. The composition and volume of information constituting a commercial secret , the method of their protection are determined by the business entity in accordance with the law.
For the illegal collection, disclosure or use of information that is a commercial secret, the guilty persons bear the responsibility established by law. ( Article 36 of the Economic Code of Ukraine ).
Also, according to Art. 505 of the Civil Code of Ukraine , a trade secret is information that is secret in the sense that it as a whole or in a certain form and combination of its components is unknown and not easily accessible to persons who usually deal with the type of information to which it belongs , in this regard, has commercial value and has been the subject of measures adequate to the existing circumstances to preserve its secrecy, taken by the person who legally controls this information.
Trade secrets can be information of a technical, organizational, commercial, production and other nature, except for those that, according to the law, cannot be classified as trade secrets.
Confidentiality agreements can be set out in the form of separate contracts or such agreements are parts of other contracts, such as employment contracts, subcontracts ( Article 862 of the Civil Code of Ukraine ), etc.

Basic terms of the confidentiality agreement

The most important element is the subject of such a condition, that is, what exactly the parties to the agreement will consider to be confidential information and, undoubtedly, the parties , that is, the persons who must comply with the confidentiality agreement.

The description of the rights and obligations of the parties and the responsibilities of the parties are the most important elements of the confidentiality agreement, as it specifies the mode of use of information with limited access and the responsibility of the parties for violations of such rules.

In the Instaco designer, you can create Agreements on confidentiality and non-disclosure of information (bilateral exchange) , Agreements on confidentiality and non-disclosure of information (one-way exchange) , as well as Non-disclosure agreement and Mutual nondisclosure agreement . To create, you only need to enter the necessary data in the designer.

Case law on confidentiality agreements

It is quite interesting to consider the judicial practice regarding the protection of the rights to use confidential information. This practice is not stable and therefore each case requires a detailed analysis and monitoring of actual court practice. Here are some interesting decisions of the Supreme Court.

In its resolution dated February 28, 2019. (case No. 752/5775/16-ts) the Supreme Court refused the Company to satisfy its cassation appeal, because the company did not provide the court with proper and admissible evidence of the illegality of using a trade secret for its own purposes, and the fact of the employee's entry while on vacation into the corporate system is not evidence of the disclosure of a commercial secret. At the same time, the court noted that , as a general rule, the burden of proving the validity of the claims of the filed claim rests with the plaintiff ; under such conditions, the proof cannot be properly implemented by solely refuting the validity of the defendant's objections by the plaintiff, since this does not exempt the plaintiff from fulfilling his procedural obligations.

In another case, the Supreme Court. ( resolution dated 23.11.2020 in case No. 910/1759/19) also refused the Company and rejected the arguments that information about prices is not a commercial secret, since it is necessary to take into account not only information about prices, but also all information in complex, and its use made it possible to conclude contracts with the counterparty's buyers, offering them more favorable conditions. At the same time, the court summarized its considerations by noting that the composition and volume of information constituting a commercial secret, the order of their protection are determined independently by the owner or manager of the enterprise in compliance with the current legislation. The company has the right to dispose of such information at its own discretion and to take any legal actions in relation to it, without infringing the rights of third parties.

Considering the cassation appeal of the Company in the case of recovery from the former manager of damages in the form of lost profits caused by the former director's violation of his obligations to preserve commercial secrecy, the Supreme Court in its decision dated 07.06.2022 in case No. 910/15998/20 refused to grant of the complaint and agreeing with the opinion of the courts of previous instances noted that when filing a claim for compensation for damages in the form of lost profit, the plaintiff must prove with proper, admissible and reliable evidence the illegality (illegality) of the behavior of the causer of damages, the presence of damages and their amount, as well as the causal the connection between illegal behavior and damages, which is expressed in the fact that the damages must be an objective consequence of the behavior of the person causing the damages. In addition, the plaintiff (creditor) must prove that he could and should have received the specified income, and only the wrongful actions of the defendant (debtor) became the only and sufficient reason that deprived him of the opportunity to receive income. That is, claims for damages in the form of lost profit must be properly substantiated, confirmed by specific calculations and evidence of the real possibility of the plaintiff receiving the relevant income, but not received due to the defendant's culpable actions. The existence of a theoretical justification for the possibility of receiving income is not yet a sufficient basis for its recovery, since only those losses in the amount of income that could actually be received under normal circumstances (are real, foreseeable and expected) are compensated in the form of lost profits.

We remind that according to Art. 36 According to the Law of Ukraine "On the Judicial System and the Status of Judges" , the Supreme Court is the highest court in the judicial system of Ukraine. The Supreme Court is the highest court in the judicial system of Ukraine, which ensures stability and unity of judicial practice in the order and manner determined by the procedural law. The Supreme Court, in particular, analyzes judicial statistics, summarizes judicial practice; ensures equal application of legal norms by courts of various specializations in the order and manner determined by the procedural law.

In accordance with Part 6 of Art. 13 of the Law of Ukraine "On the Judiciary and the Status of Judges" , conclusions regarding the application of legal norms set forth in the Supreme Court's rulings are taken into account by other courts when applying such legal norms.

Therefore, when concluding confidentiality agreements, the terms of such an agreement should be carefully spelled out, and in order to prevent possible future risks, it is necessary to take into account the existing judicial practice.

Date of publication: 31.05.2023