Use of information: Overview, definition, and example
What is use of information?
The "use of information" refers to how data, intellectual property, or other types of confidential or proprietary information can be accessed, shared, or applied within the terms of a contract. It outlines the rights and restrictions on how one party can utilize the information provided by another party. This clause is important for ensuring that information is used appropriately, protecting both parties' interests, and preventing misuse or unauthorized disclosure.
For example, a software company may grant a client the right to use certain information about their software’s functionality, but restrict the client from sharing that information with competitors.
Why is use of information important?
The use of information is important because it helps protect sensitive data and ensures that all parties involved in a contract understand how certain information can be used, shared, or disclosed. Without clear terms, businesses may face risks of misuse, loss of confidentiality, or violation of intellectual property rights. By defining the use of information in contracts, both parties have a clear understanding of their rights and obligations, reducing the risk of legal disputes.
Understanding use of information through an example
Let’s say a business shares a product prototype with a manufacturer to produce custom goods. The contract includes a clause outlining the "use of information," specifying that the manufacturer can only use the design for producing the agreed product and cannot use it for any other purpose or share it with third parties. This ensures that the business’s intellectual property is protected and not misused.
In another example, a consulting firm shares its proprietary market research with a client as part of a service agreement. The contract includes a clause that restricts the client from using the research for any purpose other than the project specified in the contract, ensuring the firm’s information is not repurposed without consent.
An example of a use of information clause
Here’s how a use of information clause might appear in a contract:
“The Recipient agrees to use the Confidential Information solely for the purpose of evaluating the services provided under this Agreement and shall not disclose, distribute, or use the information for any other purpose without the prior written consent of the Disclosing Party.”
Conclusion
The "use of information" clause is essential for protecting sensitive and proprietary data in contracts. It clearly defines how information can be used, ensuring that both parties understand their rights and limitations. By including a use of information clause in contracts, businesses can safeguard their intellectual property and avoid risks related to unauthorized disclosure or misuse.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.