MIND THE DEFINITION OF THE TRADE SECRET IN CONFIDENTIALITY (NON-DISCLOSURE) AGREEMENTS
Most businesses are aware that it is typically prudent to have contractual protection in place before sharing its sensitive information with unrelated parties. A Confidentiality Agreement is an agreement which is intended to protect a party sharing its confidential information against misuse by the other party, particularly against improper commercial use. Based on the terms of a proper Confidentiality Agreement, the receiving contractual party becomes contractually bound to keep such information in confidence, and prohibited to further disclose or misuse such information. Here is a tip how you should consider protection of your confidential information in line with your business intention.
Protection of sensitive information can help with concluding an Confidentiality Agreement. Some parties fail to receive adequate contractual protection because of confusion about the term and scope of "trade secret", which is different from "confidential information." The Slovak Commercial Code expressly defines the term trade secret and the scope of the trade secret with afforded protections defined by law.
The Slovak Supreme Court has held [1] that agreement of contracting parties which states that certain information termed in contract are subject of the "trade secret", is not enough to make these information to become the trade secret, unless such terms satisfy the conceptual definition, provided in Section § 17 of the Slovak Commercial Code. Thus, the parties may not simply alter or broadly define the trade secret in the contract through complete free will, because the scope of the trade secret must observe its legal definition.
Unlike the trade secret, the term and scope of confidential information is wider and it can include the trade secret. Therefore in Confidentiality Agreement, it is better to define all kinds of information unified as "confidential information" with simple condition, that confidential information can include the trade secret under the Section 17 of Slovak Commercial Code. The result of this move grants all your information wider contractual confidentiality protections without loosing statutory protections. It is always essential, in case of uncertainty with individual contractual definitions of numerous objects. Notably, the change of the Slovak Commercial Code brought an explicit definition of being in breach of the Confidentiality Agreement in its Section 51.
Furthermore, taking into account the intangible nature of the term confidential information, it is always difficult to calculate damages, lost profits, or unjust enrichment. Another goal which proper Confidentiality Agreement brings, is possibility to go beyond statutory protection, and ask for contractual penalty and indemnity if any of information is misused, disclosed or even threatened. Such penalty fee shall be proportional with the value and importance of the protected object, however the leak of one protected object always means the same threat for other objects which might be, at least in light of the contractual penalty, treated as the same.
Once parties identify they wish to share and protect broad sensitive information, it is typically sensible to include a detailed definition of confidential information in your contract, which can have a broader scope of protection, based on the parties' specific needs and intent, which is not merely limited to trade secret.
Mgr. Daniel Milovančevič, advokát, ATTORNEY AT LAW, 1.10.2026
[1] Judgement of Supreme Court of Slovak Republic, Case 5 Obo 98/99.