In the chemical technology world, it often happens that one company will engage another in the manufacture of some particular substance. Company A needs a particular material made according to certain specifications. Company A goes to Company B to ask for price and availability. But first, Company A must disclose the identity and certain particulars of the material to Company B.
For Company A to disclose the identity of its material, it must work out a secrecy agreement with Company B. Company A’s business depends on the material and it does not want Company B to disclose the details of the material, the process, or any other aspect of the business. So, they execute a secrecy agreement.
What is interesting about such arrangements is the great diversity of “language” in the terms among companies. Some companies are very concerned about the faintest smidgeon of errant information and write detailed terms accordingly. Others are much more concerned about the broad strokes and are apparently willing to let the courts work out the details in a conflict.
Some companies are willing to yield on unreasonable terms and conditions while others will fight to the death on even the slightest change. There is a strong correlation to the corporate culture and the extent to which a company is under a market pull influence (tolling operators) or is engaged in technology push (inventors).
In some companies, issues relating to intellectual property (IP) are strongly influenced by the lawyers. In such an organization, it sometimes happens that management is completely immobilized by indecision in IP matters. Managers may not understand the IP, are unable to engage their own lawyers in detailed discussion about the issue, or may simply be terrified of making a mistake. Doing business with organizations that are highly rigid in deference to their lawyers tends to be a more difficult activity. The thinking is that if the lawyer makes the decision, then they can take the heat if it goes south. Of course, the lawyer won’t take the heat- they’ll just bill you to get you out of the mess.
In other companies, upper management will take legal advice, but will not leave the decisions to the lawyers. These managers understand that IP is company treasure that must be put to good use in order to bring in revenues. Lawyers get paid irrespective of the outcome in the advice dispensing trade. A good manager knowns how to ride a lawyer like a cutting horse, digging in the spurs now and then to show who’s boss.
Lamentations on Chemistry 
In some cases, the secrecy can extend far beyond the IP. Most of our clients don’t even want it acknowledged that we have done work for them – some won’t even sign their company name on the registry list at the receptionist’s desk for fear that their competitor will be in later that day and notice it.
This is a huge burden on our sales staff, as we have done excellent work for hundreds of big-name clients over the years, but we can’t say who it was with and it certainly would be advantageous to closing sales if we could drop a few of these names now and then.
I know exactly what you mean. At some point, reasonable caution can evolve into paranoia. It is always safer for people to err on the side of secrecy. In some arenas like semiconductors where the product cycle is just a few years, industrial espionage and employee defections are endemic and confidential information can lead to a prompt advantage for competitors.