UNIVERSITY OF LUSAKA

SCHOOL OF LAW

L340 – IP LAW
UNIT 28 – LAW OF BREACH OF CONFIDENCE
George Mpundu Kanja
 Structure of Presentation
• Introduction
• Historical Development
• Elements of Breach of confidence
• Confidential Quality
• Confidential Obligation
• Unauthorized use of Confidential Information
• Remedies
• Public Interest Defence
 Introduction

• The law of breach of confidence is concerned with

the protection of secrets or commercial valuable
information that may have been communicated or
obtained in confidence.
• The action for breach of confidence protects
confidential information by preventing persons to
whom the said information has been divulged in
confidence from using that information to gain
unfair benefit for themselves, or further disclosure
of such information.
 Introduction

• There various types of information that can be

considered to be confidential in nature because the
subject is one which in the normal circumstances
would generally not be disclosed to the public.
• However, in practice, confidential information
generally tends to fall into three categories namely,
 trade secrets,
 government secrets and
 private personal information.
 Introduction

• In the context of intellectual property rights, the law of

breach of confidence is particularly relevant to protect
inventions and designs before they are formally registered
and protected by an intellectual property rights.
• Notable examples of the law of confidence are the formula
for making Coca-Cola and the source code for windows.
• The law of confidence imposes a duty of confidentiality on
any person who is connected with the production process.
The protection provided by the law of confidence lasts till
the process is discovered by another inventor separately.
 HISTORICAL DEVELOPMENT

• The law of breach of confidence traces its roots from the

middle of the nineteenth century.
• The leading case to deal with the subject matter was Prince
Albert v Strange.
• Queen Victoria and her consort had executed a private
collection of etchings of which impressions had been printed
and carefully guarded.
• By his amended bill, the Prince asserted that Strange, together
with two other defendants, both called judge, and their
confederates, had in some manner obtained impressions,
which had been surreptitiously taken from the plates.
 HISTORICAL DEVELOPMENT

• The defendants were restrained by injunction from exhibiting,

publishing, parting with or disposing of the etchings, and from
printing a descriptive catalogue of the etchings.
• Lord Cottenham L.C. said:
• …I am clearly of opinion that the exclusive right and interest of the
plaintiff in the composition or work in question being established,
there being no right or interest whatever in the defendant, the
plaintiff is entitled to the injunction of this court to protect him
against the invasion of such right and interest by the defendant,
which the publication of any catalogue would undoubtedly be; but
this case by no means depends solely upon the question of
property, for a breach of trust, confidence, or contract, would of
itself entitle the plaintiff to an injunction.”
 HISTORICAL DEVELOPMENT

• The nature of an action for breach of confidence was further considered in

the case of Morison v Moat.
• In that case Morison senior and Moat senior entered a partnership to exploit
Morison senior’s “invention” (unpatented), which was sold as “Morison’s
Universal Medicine”. Morison senior gave the recipe of the medicine to Moat
senior under a bond not to reveal it to any other person. Shortly before moat
senior’s death he appointed his son, the defendant, to succeed him in
partnership, as he had power to do. Morison senior and his sons were led to
believe that Moat had not told the secret recipe to the defendant, but he
had. The partnership eventually terminated and Moat junior began to
manufacture in accordance with the recipe of his own account.
• The Morisons succeeded in obtaining an injunction to restrain him , though
they failed to have enjoined from using the name “Morison’s Universal
Medicine.
 HISTORICAL DEVELOPMENT

• Turner V.C stated as follows:

• The defendant admits that the secret was communicated
to him by Thomas Moat. His allegation that he acquired
knowledge of it by acting as partner in the concern is
disapproved; and it is shewn that, if he did acquire such a
knowledge, he did so surreptitiously. The question is
whether there was an equity against him; and I am of the
opinion that there was. It was clearly a breach of faith and
of contract on the part of Thomas Moat to communicate
the secret. The defendant derives under that breach of
faith and of contract, and I think he can gain no title to by
it.
 HISTORICAL DEVELOPMENT

• The case of Saltman Engineering Co Ltd v Campbell

Engineering Co Ltd laid the foundations of modern
form of the law of breach of confidence. Saltmans
associated companies owned copyright in drawings
for a leather punch. On their behalf, a third person,
Monarch arranged for the defendant to
manufacture punches for them. It was alleged that
in implied breach of confidence the defendant
used the drawings to manufacture and sell its own
punches.
 ELEMENTS OF THE BREACH OF CONFIDENCE

• The elements of the action for breach of confidence were laid

down by Megarry J. in the case of Coco v AN Clark(Engineers)
Ltd.
• Megarry J. identified three elements required to establish the
action for breach of confidence. He stated as follows:
• “In my judgment, three elements are normally required if, apart
from contract, a case of breach of contract is to succeed. First,
the information itself, (in the words of Lord Greene M.R. in the
Saltman case) must “have the necessary quality of confidence
about it.” Secondly, that information must have been imparted
in circumstances importing an obligation of confidence. Thirdly,
there must be an unauthorized use of that information to the
detriment of the party communicating it.”
 ELEMENTS OF THE BREACH OF CONFIDENCE

• For information to be treated as confidential

and subject to protection by the law of
confidence it must meet the requirements
stated in the case of Coco v AN
Clark(Engineers) Ltd, namely:
• (i) Quality of Confidence
• (ii) Obligation of Confidence
• (iii) Unauthorised Use of Information
 CONFIDENTIAL QUALITY

• Various types of information may be considered

as confidential information. These may include
technical, commercial or personal or private
information.
• In R v Department of Health, Simon J. stated that
there are four main classes of information
traditionally regarded as confidential, being trade
secrets, personal confidences, government
information and artistic and literary confidences.
 CONFIDENTIAL QUALITY

• The law of confidence does not require information to be

completely secret in order to be considered confidential.
• Information will be protected provided that it is limited in
the scope of its availability. The information to be
protected must not be common or public knowledge or a
matter of public record.
• Information which is not readily available to the general
public is capable of protection, but once information
becomes publicly available or known by a substantial
number of people it will lose its confidential character.
 CONFIDENTIAL QUALITY

• Therefore, simply marking the document

“PRIVATE AND CONFIDENTIAL” will not be
considered sufficient to make the document
so marked qualify as confidential if the
information is in public domain.
 Trade Secrets
• All businesses have trade secrets. Thus any confidential
business information that provides an enterprise with a
competitive edge may be considered to be a trade secret.
• These may include the manufacturing processes, techniques
and know-how, lists of customers, formulas for producing
products, personal records, financial information, manuals,
ingredients, business strategies, business plans, marketing
plans, information about research and development
activities.
• The unauthorized use of such information by persons other
than the holder is considered unfair practice and a violation
of the trade secret.
 Trade Secrets
• In Thomas Marshall (Exports) Ltd v Guinle Megarry
J. provided a working definition of trade secrets.
• In order to define trade secrets in a business or
industrial setting Megarry V-C formulated the
following requirements to be satisfied if
information was to be considered as confidential:
• (1) The information must be such that the owner
believes that its release would be injurious to
him, or would be advantageous to his rivals or to
others;
 Trade Secrets
• (2) The owner must believe that the
information is confidential or secret and not
already in the public domain.
• (3) The owner’s belief under 1 and 2 must
reasonable.
• (4) The information must be judged in the
light of the usage and practices of the
particular industry or trade concerned.
 Government Secrets
• The issue of government secrets raises important
public policy issues over and above those
encountered in relation to other types of confidential
conformation.
• The preservation of secrets pertaining to national
security and international relations is balanced
against issues of free speech and open dissemination
of news and current affairs.
• Thus the State Security Act, Cap 111 makes an offence
for any person to communicate certain information.
 Government Secrets
• Any person who has in his possession or under his control any
code, password, sketch, plan, model, note or other document,
article or information, which relates to or is used in a protected
place or anything in such a place, or which has been made or
obtained in contravention of the Act, or which has been entrusted
in confidence to him by any person holding office under the
Government, or which he has obtained or to which he has had
access owing to his position as a person who holds or has held
such office or as a person who is or was a party to a contract with
the Government or a contract the performance of which in whole
or in part is carried out in a protected place, or as a person who is
or has been employed under a person who holds or has held such
an office or was a party to such a contract, and who:
 Government Secrets
• (a) uses the same in any manner or for any purpose prejudicial to the
safety or interests of the republic; or
• (b) communicates the same to any person other than a person to
whom he is authorised to communicate it or to whom it is in the
interests of the republic his duty to communicate it or;
• (c) fails to take proper care of, or so conducts himself as to endanger
the safety of, the same; or
• (d) retains the sketch, plan model, note, document or article in his
possession or under his control when he has no right or when it is
contrary to his duty so to do, or fails to comply with any lawful
directions with regard to the return or disposal of the same
• shall be guilty of an offence and liable on conviction to imprisonment for
a term of not less than fifteen years but not exceeding twenty-five
years.
 Government Secrets
• Furthermore, the State Security Act prohibits the
communication of classified information.
• Therefore any person who communicates any
classified matter to any person other than a person
to whom he is authorised to communicate it or to
whom it is in the interests of the Republic his duty
to communicate it shall be guilty of an offence and
liable on conviction to imprisonment for a term not
less than fifteen years but not exceeding twenty-
five years.
 Personal Information

• If personal information is not generally known

and would not be disclosed by the subject of the
information it will be protected by the law of
confidence.
• In Argyll v Argyll, the Duke of Argyll was
prevented from publishing information about his
wife’s private affairs and personal habits. The
information was based on the confidential
relationship or spouse privilege which exists
between married couples.
 Personal Information

• Also doctors have a duty to refrain from

disclosing information concerning their
patients without the patient’s consent.
• Similarly, lawyers are bound by a duty of
confidence to refrain from disclosing
information confided in them by their clients
to third parties.
 CONFIDENTIAL OBLIGATION

• The second requirement in an action for breach

of confidence is that there must be obligation of
confidence which arises from the circumstances
in which the information was imparted.
• This obligation may arise by express agreement
or prior notice, or it may be implied by law, for
instance, in a fiduciary relationship or by
general equitable principles.
 Fiduciary Relationships

• In a fiduciary relationship equity imposes an obligation on

the trustees to act not in their interests but in the interests
of the beneficiaries.
• The close relationship between the trustees and
beneficiaries entail that some information will pass
between the parties which is likely to be considered
confidential.
• The obligation can arise in a number of cases such as
company directors and top managers owe a fiduciary duty
to their company; also professionals such as lawyers and
accountants may owe fiduciary duties to their clients.
 Fiduciary Relationships

• In Farman & Plantt Ltd v I Barget Ltd the plaintiff

company, engaged in the reproduction furniture trade,
commissioned a report on its somewhat parlous financial
condition. One of the defendants, Hutchins, then the sales
manager of the plaintiff, appears to have taken the report
from the desk and then circulated it to the other sales
representatives of the company, so as to lure them to the
rival firm which Hutchins was intending to join.
• The court held this to be a clear breach of confidence by
a senior employee and as such held to be actionable.
 Contractual Relationships

• Provisions are often found in formal contracts

provisions dealing with matters of confidence
and imposing a duty on one or both parties not
to disclose or use certain information which may
be considered confidential.
• In the absence of an express contractual
provision the person who wishes to maintain
confidentiality will have to rely on an implied
duty of confidence to prevent unauthorized
disclosure.
 Employer/Employee Relationship

• An employee owes a duty of confidence to his

employer and this duty may be expressly stated
in the contract of employment.
• In the absence of an express contractual
provision the employer who wishes to maintain
confidentiality will have to rely on an implied
duty of confidence to prevent unauthorized
disclosure or use. It is possible for the courts to
hold that a duty not to disclose applies to them.
 Employer/Employee Relationship

• In judging whether or not the recipient of

information is bound by a duty of confidence the
courts will consider whether
• “… the circumstances are such that any
reasonable man standing in the shoes of the
recipient of the information would have realized
that upon reasonable grounds the information
was being given to him in confidence, then this
should to impose upon him the equitable
obligation of confidence”.
 Employer/Employee Relationship

• The information which the employer is

concerned most about are ‘trade secrets’
which have been passed on to the employee
or which the employee has acquired during
the course of employment.
• In Printers & Finishers v Holloway an
injunction was granted against the employee
using confidential information (documentary
material) he acquired from his employer.
 Third Party Relationship

• Confidential information does extend to third

parties.
• In Argyll v Argyll the Sunday newspapers were
restrained to disclose information which was
of private and confidential nature which the
Duchess had told the Duke, and which then
the Duke passed on to the newspapers. The
newspapers had also been aware of the
confidential character of the information.
 UNATHORISED USE OF CONFIDENTIAL INFORMATION

• The third element in the action for breach of

confidence is the unauthorized use of confidential
information to the detriment of the party
communicating it.
• The obligation of confidence obliges the recipient
of confidential information to make use of it for
only those purposes specified either explicitly or
implicitly by the owner of the information. The
person obliged may not make use of the
information himself or disclose it to others.
 UNATHORISED USE OF CONFIDENTIAL INFORMATION

• A breach of confidence need not be

deliberate and if any person fails to take
reasonable care to identify and look after
confidential information that has been
passed to him then he will be liable for
breach of confidence through negligence.
 REMEDIES

• The remedies available for breach of

confidence are
 injunction,
 damages,
 accounts of profits and
 delivery up and destruction of infringing
materials.
 PUBLIC INTEREST DEFENCE

• In breach of confidence actions the defendant can

avoid liability by establishing that he in fact had
the plaintiff’s consent to disclose or use the
information that is the subject of the action.
• Furthermore, the defendant can escape liability of
the breach of confidence where he discloses
confidential information if it is in the public
interest that the confidential information is made
available to the public at large or to a restricted
class of the public such as an official body.
THANK YOU