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Law of Confidence
Developed through cases Protects person who discloses secrets to another in circumstances of confidence from having that trust broken
Can be used to protect personal information, state secrets, commercial and trade secrets
In latter capacity, particularly, an important adjunct to intellectual property
1. The Basic Framework 2. Ctd. Plus Difficult Issues (jurisdiction, justification) 3. Employees 4. Privacy and Publicity Rights.
Historical Origins The Components of the Classic Action: Coco v A.N. Clark  RPC 41; AG v. Guardian (No. 2) 1 AC 109 (HL)
But note, for later,:
The impact of the Human Rights Act 1998 The Case-Law: especially Campbell v MGN and Dou
glas v. Hello!  1 AC 1
Obscure. „Common law copyright‟
Yovatt v Winyard (1820) 1 Jac & W 394; Abernethy v Hutchison (1824)
3 LJ (OS) (Ch) 209
Prince Albert v Strange (1849) 1 Mac
& G 25
Morison v Moat (1851) 9 Hare 241
The Classic Formulation
Coco v A.N. Clark  RPC 41, 47,
per Megarry J: Information having „the necessary quality of confidence‟ Obligation of confidence Breach (to detriment of confider?) Defence (esp „public interest‟)
Information Having the Necessary Quality of Confidence
Defining the information Kinds of information (personal, commercial, governmental)
Form of information
Two Exclusions (1) Exclusion of trivia:
AG v Guardian (No 2)  1 AC
109 per Lord Goff „[action] applies neither to useless information or to trivia”
Douglas para 290 (Walker, suggesting Creation Records, and
distinguishing from private life); 307 (Hale)
And note Michaelos (2007) Ent LR 241, 244 (not all inaccessible information is confidential; trivial information about what someone
looked like on their wedding day should not be protected) (2) Exclusion of ‘immoral information’: Stephens v Avery (public consensus test) Relative Secrecy Key criteria: relative secrecy Comparison with „novelty‟ in patent law (article in sanskrit mis-located in childrens‟ section of library in Alice Spring=novelty destroying) Not secret if generally known to those in the field who are interested Relative secrecy lies somewhere in between.. ..
Clark  FSR 415: „there must be some product of the human brain which suffices to confer a confidential nature upon the information‟ (claim failed) Fraser v.Novelty or Originality as Conferring Secrecy Coco v. e.‟ De Maudsley v. that large. the idea must have some significant element of originality not already in the realm of public knowledge. of course. Palumbo  FSR 447 (idea of all-night club „old‟.g. Thames TV  QB 44 „Unquestionably. „lacked novelty‟) . other ideas.
38)…A nonobviousness test? (also para. to those skilled in the art of resin manufacture and design. are. Cray v. very ordinary.‟ (para. 54) Are Basic Ideas Protectable? De Maudsley v Palumbo  FSR 447: „Before the status of confidential information can be achieved by a concept or an idea it is necessary to have gone far beyond identifying a desirable goal. A . Deltech  EWHC 728 „The recipes… although not published to the world in full.
‟ Are Precautions Required? In context of employment case-law.considerable degree of particularity in a definite product needs to be shown to be the result of the mental process in question. and rejected Cray‟s claim because it had allowed recipes for resins to be left at plant „even though anything of . That does not of course exclude simplicity. a factor in deciding whether information reaches higher standard of being a trade secret Cray Valley  EWHC 728 Jacob J referred to US UTSA.
value. was taken.‟ No further development of criteria for determining „reasonable efforts‟ Losing Secrecy Quality of secrecy is lost by publication: AG v Guardian (No 2)  1 AC 109 per Lord Goff But Douglas v Hello!  1 AC 1 (the difference between Hoffmann (para 122)/Brown (para 329) and Nicholls (para 257-259) and Walker) Arnold (2007 EIPR) describes as „a substantial extension to the law of confidence. down to the paper cups.‟ .
sought injunction against Dosen and his new employer. was a trade secret no longer‟ Lord Buckmaster: „the secret as a secret had ceased to exist. M. The CA and HL refused injunctive relief. HL)  RPC 41 Dosen had been involved in invention of machine for making fish-hooks. assignee of confidentiality obligation. Atkin LJ: „that which before might have been a trade secret.Losing Confidence (I) Mustad v Dosen (1928. M patented the machine in UK.‟ .
Associated Newspapers  ECDR 244 (distribution of journal to 75) Is accessibility sufficient? Franchi v Franchi  RPC 149 (Belgian patent case) Where? How precisely must it be disclosed? . Losing Confidence (II) • How widely must it be disclosed to fall into the „public domain‟? HRH Prince of Wales v.But. some remaining doubts as to whether it matters who published.
. In my judgment. the press coverage. it can no longer be regarded as confidential. The statements in the press that . ask whether the identity of The Stig is so generally accessible so that. in all the circumstances.. goes well beyond speculation as to the identity of The Stig.BBC v Harper Collins  EWHC 2424 (Ch) (Morgan J) BBC v Harper Collins  EWHC 2424 (Ch) (Morgan J) I . in particular the press coverage in August 2010.
Teknowledge  FSR 138 (owner entitled to dismantle. ... Reverse Engineering Mars v. anyone who would have any interest in knowing the identity of The Stig now knows it. The identity of The Stig is no longer a secret and it is no longer confidential information.Mr Collins was The Stig would be understood by the public as statements of fact. The number of different newspapers which have stated that fact is such that the fact is now generally accessible. For all practical purposes. so encrypted information in claimant‟s .
EPROM for coin machine was not confidential) Cray Valley  EWHC 728 (clearly assumed to be legitimate eg para 54) The Springboard Doctrine (I) Terrapin v Builders Supply  RPC 375 „a person who has obtained information in confidence is not allowed to use it as a springboard…and a springboard it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public.‟ .
the possessor of the confidential information…has a long start…‟ . Dosen? Springboard doctrine (II) Or reflects idea of relative secrecy: Facts of Terrapin: publication was by marketing of building units and brochures. specifications.Therefore. „The brochures are certainly not equivalent to the publication of the plans. Special restriction on confidant An exception to Mustad v. other technical information and knowhow….
206: Does Not Last Forever Calculating Limited Injunctive Relief – Bullivant v. Ellis  FSR 172 Or Damages? Coco v Clark  Springboard (IV): the latest doubts EPI Environmental Technologies Inc v. Symphony Plastic Technologies  EWCA Civ. Buxton LJ . WestonBaker  RPC 202.Springboard Doctrine (III) Potters Ballotini v.
that seem to inhibit use of even public domain material if it is conveyed in circumstances that aspire to confidence …” The Obligation of Confidence Various sources: contract (express or implied).“I for my part find it by no means straightforward to reconcile on the one hand the apparently blanket rule that any claim of breach of confidence must fail if the material in question is in the public domain … and on the other hand the "springboard" cases. or equity .
Coco v Clark  RPC 415: reasonable person standing in shoes of recipient would understand information being given in confidence. Megarry J had no doubt that was. Prompted by officious bystander. would parties say „obviously is confidential‟. On facts. The Obligation of Confidence Express statement Nature of relationship (doctorpatient) .
Third Parties Courts treat as bound if knew confidential . 4201 („where information of commercial or industrial value is given on a business-like basis and with some avowed object in mind.I would regard the recipient as carrying a heavy burden if he seeks to repel a contention that he was bound by an obligation of confidence. Disclosure for limited purpose: Coco  FSR 415..‟) But if „blurted out in public‟ or in social environment no obligation (Palumbo v De Maudsley).
But (a) position of bona fide purchaser unresolved (Tchenguiz.  EWCA Civ 908. 260 per Lord Keith) (b) later. para 74: claimant will prevail unless bfpwn) (b) Possible differentiation in relation to remedy: Valeo Vision  RPC 205 (no damages unless knew) (c) Courts have yet to clarify precisely the „knowledge‟ concept .(a) when the information was received (AG v Guardian (No 2)  AC 109.
Shelley v Rex Features  EMLR 134 Douglas v Hello!  1 AC 1 (Was Thorpe a stranger? Where did obligation come from?) Lord Walker (para 292) „the law took an important step forward‟ in Spycatcher .Strangers? AG v Guardian (No 2)  1 AC 109 per Lord Goff („obviously confidential‟ – knowledge based) Creation Records  EMLR 444.
it must. obtains information in respect of which he must have appreciated that the claimant had an expectation of privacy.Techenguiz v Imerman [20 10] EWCA Civ 908 (Lord Neuberger MR) If confidence applies to a defendant who adventitiously. and without authorisation. It would seem to us to follow that intentionally obtaining such information. a fortiori. but without authorisation. secretly . takes steps to obtain such information. extend to a defendant who intentionally.
‟ Breach . licensees of confidential information a right of action. 343: „the effect of it will be to give many exclusive. is itself a breach of confidence. Whether this is a good thing or not remains to be seen.and knowing that the claimant reasonably expects it to be private. To Whom Owed? Douglas v Hello  1 AC 1 – majority – not just to Douglas/Z-J but also to OK! Why? Arnold (2007) EIPR 339. and indeed nonexclusive.
esp. in light of D‟s additional features – no alcohol/over 21a) Is acquisition a breach? Tchenguiz v Immerman  EWCA Civ . separate dancing areas -. Innocence: Seager v Copydex (subco nscious copying of carpet-grip idea nevertheless a breach) Must be derived Effect of developing information may mean avoid liability: De Maudsley v Palumbo  FSR 447 (no liability where used only 2 of 5 components of idea – all night.
retain. without the authority of the claimant. or to make. 256 per Lord Keith (state must prove public interest in restraining disclosure. The Damage Question AG v Guardian (No 2)  1 AC 109. a document whose contents are. confidential to the claimant. with personal . it would be a breach of confidence for a defendant. or supply copies to a third party of. and were (or ought to have been) appreciated by the defendant to be.  In our view. to examine.
information no need to show detriment) Also McKennitt v Ash. 413-4 Public interest Defence: Origins Gartside v Outram (1857) 26 LJ Ch 113 – P alleged that clerk had copied confidential docs – D said they disclosed fraud – D filed interrogatories and P refused to . Bluck v Inform ation Commissioner Federal Bank of Middle East v Hadkinson  2 All ER 395.
answer. Page-Wood VC said P had to answer. You cannot make me the confidant of a crime or fraud…” Developments (overview) From iniquity to misconduct: Initial Services v Putterill  1 QB 396. 405 (Lord Denning) From misconduct to „public interest‟ (particularly Lion Laboratories v Evans  QB 526) From absence of obligation to „balancing‟ (esp in AG v Guardian . “The true doctrine is that there is no confidence as to the disclosure of an iniquity.
282 per Lord Goff: “there is a public interest that confidences should be preserved…nevertheless that public interest may be outweighed by some other counterveiling public interest which favours disclosure..(No 2) (though this has not gone uncriticised) From balancing to justifying restricting free expression (post HRA) Public Interest Balancing Woodward v Hutchins  1 WLR 760 AG v Guardian (No 2)  1 AC 109. .[This] may .
” W v Egdell  Ch 359.require a court to carry out a balancing operation. the right to receive and impart information London Regional Transport v Mayor of London  EWCA Civ 1491 (Sedley LJ emphasising proportionality: does the measure meet a recognised and pressing social need? Does it negate the primary right or restrict it more than .. 420 (CA) (emphasising two public interests rather than private versus public) The HRA 1998 Art 10 – freedom of expression.
in breach of the country‟s security. including matters medically dangerous to the public. and doubtless other misdeeds of similar gravity” Public Interests . or otherwise destructive of the country or of its people. or in breach of law.necessary? Are the reasons given for it logical?) Beloff v Pressdram  1 All ER 241 Disclosure “of matters carried out or contemplated. fraud. including statutory duty.
shooting. v Egdell  Ch 359. bombs. likely move to regional secure unit and into community) Lion Laboratories v Evans  QB 526 (public interest defence even where P not guilty of wrongdoing because inaccuracies of intoximeter might lead to people being wrongfully convicted) Other Public Interests – Correcting Falsities . Hubbard v Vosper  2 QB 84 (dangerous medical quackeries) W. 423-4 (interest in guns.
Initial Services v Putterill  1 QB 396 (P had given consumers a false explanation for its high prices) Woodward v Hutchins  1 WLR 760 (Tom Jones/ Engelbert Humperdink. Public had a right to know the truth) Factors Nature/Weight of Public Interest in disclosure (difference from what is interesting to the public) Strength/nature of obligation Nature of Breach To Whom Disclosed (proper authority: reflect idea that should . Presented themselves in one way.
Published in TNoTW. Secretly filmed participating in sado-masochistic orgy. head of FIA.not negate primary right more than necessary) Motives of Discloser (care not to confuse interest of public with interest in selling newspapers) Beliefs of Discloser Receipt of Money Mosley v News Group Newspapers  EWHC 1777 (QB) M. .
there may have been public interest justifying disclosure to FIA.‟ Had it been. not „Nazi. on facts. D argued in public interest: „Nazi‟ components and illegal Eady J. Considers relevance of journalist‟s beliefs that was Nazi. Other Justifications for disclosure: Freedom of Information? Confidentiality applicable to government confidence But countervailing rights to disclosure .
43. 43 Note Veolia v Nottinghamshire CC  EWCA Civ 1214 (on analogous legislation) Interim Injunctions . Freedom of Information act exempts from disclosure information disclosed in confidence (s. subject to public interest test) Application to procurement contracts: in general contractual information not regarded as“disclosed”. So disclosure subject to weighing under s.41). trade secrets (s.
s. 12(3) . General approach: American Cyanamid v. reinterpreting AC so as supporting flexible approach so as to enable the court to take account of strength of parties‟ cases as one factor) The Human Rights Act 1998. Ethicon  AC 396 (HL): (i) Is there a serious question to be tried? (ii) What is the balance of convenience? (iii) No review of complex factual issues Series 5 Software  FSR 273 (Laddie J.
(4) The court must have particular regard to the importance of the Convention right to freedom of expression and. if granted. might affect the exercise of the Convention right to freedom of expression. (3) No such relief is to be granted so as to restrain publication before trial unless the court is satisfied that the applicant is likely to establish that publication should not be allowed. to be . "(1) This section applies if a court is considering whether to grant any relief which. or which appears to the court. where the proceedings relate to material which the respondent claims.
…As to what degree of likelihood makes the prospects of success 'sufficiently . or would be. (b) any relevant privacy code. or is about to. become available to the public. rigid standard governing all applications for interim restraint orders.(i) the material has. literary or artistic material (or to conduct connected with such material). to . Cream Holdings v Bannerjee  1 AC 253 “There can be no single. in the public interest for the material to be published.journalistic.(a) the extent to which . or (ii) it is.
the general approach should be that courts will be exceedingly slow to make interim restraint orders where the applicant has not satisfied the court he will probably ('more likely than not') succeed at the trial.” Perpetual Injunction Vestergaard v.favourable'. Bestnet  EWHC 1456 (ch) Generally entitled to injunction save in exceptional circumstances (para 41) Shelfer  principles can be applied by analogy (if injury can be adequately compensated and it .
per Turner LJ at 255: “Different grounds have been assigned for the exercise of that jurisdiction…” .would be oppressive to grant injunction) BREACH OF CONFIDENCE – DIFFICULT ISSUES Lionel Bently Jurisdictional Debate Is the action based in contract. property or equity? Morison v Moat (1851) 9 Hare 241. tort.
... per Rix LJ : “confidential information is a well recognised species of property.. private international law.why valuable commercial confidential information. Why might it matter? Third parties.  “I can see no reason. limitation... Protocol 1 of ECHR]. cannot fall within the concept of "possessions“ [within Art 1. remedies. Increasing Recognition as Property Veolia [2010 EWCA Civ 1214. . protected by the common law”.
Gray v NGN  EWHC 349 (Ch) Vos J (voicemails containing commercially confidential information were “intellectual property” for the purposes of an exemption to the rule against selfincrimination) Damages for Breach of An Equitable Duty? (E&W) Saltman v Campbell (1948) 65 RPC 203 Seager v Copydex  2 All ER 415 Malone v. 360 (only remedy is account where no injunction would issue) . Metropolitan Police Commissioner  Ch 344.
286 (Lord Goff) (now available. through a beneficent interpretation of the Chancery Amendment Act) Vestergaard  EWHC 1456 (Ch) (paras 33-35) In Australia: “equitable compensation. despite the equitable nature of the wrong. Guardian Newspapers  AC 109.Attorney General v.” Mosley v News Group Newspapers  EWHC 1777 (QB) .
) V came up with idea of buying H & T Ltd (pawnbrokers) and manage it .000 Is a Profits Remedy Available for Breach of a Contractual Duty of Confidentiality? Vercoe v.‟ (para 216) Looks at libel tariff as comparator £60. hurt feelings or loss of dignity. Discussion of „exemplary damages‟ (para 172-211 (rejects) Recognises that compensatory damages can include damage for „distress. RFML  EWHC 424 (Ch) (Sales J.
when offered $30k. RFML envisaged V‟s involvement. In July relations broke down. But V&S needed venture capital. RFML bought H&T Ltd in Sept 2004 for £72m but did not involve V&S who had no experience (instead using mostly existing managers). who was to be retained as MD. Approached RFML in Sept 2003. a key figure at H&T. . but N.as “Peoples‟ Cash”. and a further contract in Nov. but did not tell until Mar 2004. with P. with NDA. RFML had doubted P from before Sept 2003. disliked V. and. worked up a business plan for “Project Scrooge”.
Parties agreed “what RMFL should be taken to have agreed to pay P & V to obtain their consent to use conf inf for other than the “permitted purpose”. RFML  EWHC 424 (Ch) (Sales J. On facts.) Breach of Contract: paras 288-9. RFML developed H&T before selling off at profit of £29m. . Held: breach of contract and confidence.5% share of equity for P. 2. Did not use business plan. What remedy? Vercoe v. 5% for N.
or commercial contract) (para 344). . Not a question of history but of principle: what is “the just response to the wrong in question”? (para 339) Damages appropriate unless there is “something exceptional” Confidence applies to “a very wide range of factual situations”: appropriate remedies may reflect whether subject is like intellectual property. whether situation one of trust. contract prevails (para 329) Others involved were aware of contracts. Could P&V get account? No. Here contract-like. Breach by RFML: where contract defines.
but some not (just information eg customers.Justifications o Some elements created. prices etc) Justifications promises should be kept (as with contract law) ideas of privacy (appealing to notions of autonomy or dignity): applicable to companies? „contractarian‟ – what businesses would agree (see Kim Lane Scheppelle. Legal Secrets) eliminate wasteful expenditure on protection (Landes and Posner) o o o o o .
Landes & R. The Economic Structure of Intellectual Property Law (2003) 354371 o Sees trade secret protection as confined to situations where otherwise would induce “costly defensive measures” (365) “So about all that is clear concerning the appropriate scope of trade secrecy law is that obtaining a trade secret by force or fraud…should be punishable o .W. Posner.
. trade secret law is merely a collection of other legal norms –contract.because of the heavy costs that would be incurred in self-help remedies against such incursions if they were lawful and the damage to the incentive to invent that would be produced. Rather. „A New Look at Trade Secret Law: Doctrine in Search of a Justification‟ (1998) 86 Cal Law Rev 241 o “Simply put. the thesis is that there is no such thing as a normatively autonomous body of trade secret law.” Bob Bone.
Trade secret law is in this sense parasitic: it depends on a host theory for normative support. Neither the fact that a trade secret is information nor the fact that it is a secret provides a convincing reason to impose liability for a non-consensual taking.” (246) . and the like – united only by the fact that they are used to protect secret information. much of trade secret law becomes comprehensible…[but] much of its doctrinal structure becomes difficult to justify.fraud.” (245) o “With this insight.