#3602 - Breach Of Confidence - Intellectual Property Law

BREACH OF CONFIDENCE

Involves equitable or contractual duties of confidence owed by D to C, where C has given some information to D.

Is breach of confidence where:

1. Information divulged has necessary quality of confidence about it

2. Information was imparted in circumstances importing an obligation of confidence

3. Was unauthorised use of that information to detriment of party communicating it

• Coco v Clark [1969]

  INFORMATION

  Traditional test applies to commercial or governmental information,

  Information which may be protected includes:

1. Commercial secrets

   Coco v Clark [1969]

2. Governmental secrets

   cabinet discussions

   Attorney-General v Cape [1976]

   Information may be protected regardless of what form it is conveyed to D in

   e.g. oral, written

   Fraser v Thames TV [1984]

Confidentiality

Information must be confidential

i.e. not already in “realm of public knowledge”

Fraser v Thames TV [1984]

1. Originality

   originality of information may suffice to show secrecy

   i.e. where information is “some product of human brain” which confers confidential nature on it

   Coco v Clark [1968]

   thus if idea lacks novelty, not secret

   De Maudsley v Palumbo [1996]

2. Development of idea

   simple ideas are capable of protection

   De Maudlsey v Palumbo [1996]

   however idea cannot be protected if it is not sufficiently particular and defined

   vague idea does not suffice

   De Maudsley v Palumbo [1996]

   but also no need for idea to be fully developed

   Fraser v Thames TV [1984] (idea for TV show)

3. Precautions

   Information will not be confidential if C does not take precautions to keep idea a secret

   i.e. where he knows inaction will cause information to fall into hands of third party

   Cray Valley [2003]

   C’s behaviour treated as evidence that info is not confidential.

Exclusions

Information will not be protected if it is:

1. Immoral

   very high threshold for immorality

   Stephens v Avery [1988] (C’s homosexuality not ‘immoral’)

2. Trivia

   where information is useless or trivia

   AG v Guardian (No.2) [1990]

   seems to be high threshold

   e.g. wedding photos do not constitute ‘trivia’

   Douglas v Hello [2008]

Losing Secrecy

Secrecy of information may be lost where it has entered the public domain.

AG v Guardian (No.2) [1990]

1. Publication

   secrecy is usually lost via publication

   either in UK or abroad

   AG v Guardian [1990]

   however even if information has been already published abroad, may still be secret if publishing it in UK would bring it to attention of more people in UK

   AG v Observer [1990] (Lord Keith)

   NB to see whether info has been disclosed, necessary to look at what particular information is protected

   Douglas v Hello [2008] (Lord Hoffmann) (spectacle of wedding as a whole protected)

   mere speculation in public domain as to nature of information does not suffice

   to lose secrecy, public must understand information as a statement of fact

   BBC v Harper Collins [2010]

2. Width of Disclosure

   information enters public domain where it is so generally accessible it can no longer be said to be confidential

   AG v Observer [1990]

   thus mere availability of information to public suffices

   Mustad [1928] (patented invention)

   where info not generally available, unclear how widely information needs to be disclosed before it enters ‘public domain’

   e.g. disclosure to 75 friends is not a loss of secrecy

   HRH Prince of Wales v Associated Newspapers [2006]

3. Publication by Whom?

   does not matter who publishes info

   i.e. even if it was published without consent of person to whom confidential obligation is owed, loses secrecy

   AG v Guardian (No.2) [1990]

   earlier cases had held that where info published by someone other than person to whom obligation of confidence owed, secrecy was not lost

   i.e. obligation of confidence still applied

   Cranleigh v Bryant [1966]

Reverse Engineering

‘Reverse engineering’: where business takes product of a competitor to pieces so as to understand it better

Information that can be acquired from reverse engineering is no longer confidential

Mars v Teknowledge [2009]

Mere act of putting product on market means information contained in product loses secrecy

Mars [2009]

Springboard Doctrine

Where D receives confidential information from C, but the information is also available in public domain

Here, D is not allowed to use information as a ‘springboard’ for activities harmful to C

Terrapin v Builder Supply [1967]

This is case even if relevant information is accessible by members of public

Terrapin v Builder Supply [1967]

1. Duration

   Springboard does not last forever

   Thus is no breach of confidence once length of time has passed in which member of public could have ascertained info himself

   e.g. from reverse engineering or compiling it from public sources

   Vestergaard [2009]

   Thus any injunction must last no longer than this period

   Vestergaard [2009]

2. Explanation

   appears to be an exception to Mustad

   thus some judges have had trouble with existence of doctrine

   EPI Environmental Technologies [2006]

   explanation: doctrine recognises idea of relative confidentiality

   i.e. information available to public may be in different form to information in its private capacity between C and D

   here, will be much easier for D to use info than a member of public

   Vestergaard v Bestnet [2009]

   2. OBLIGATION OF CONFIDENCE

• Info must be communicated in circumstances importing quality of confidence.

• Examples:

1. If C and D have particular relationship, will be obligation

   husband-wife

   Argyll v Argyll [1967]

2. If info is obviously given in confidence, will be obligation

   e.g. C takes D to corner and whispers in his ear

3. If info given for a limited purpose, likely to be obligation

   i.e. where info is given on a business-like basis and with some avowed object in mind

   Coco v Clark [1969]

4. If info given in social setting, will not be obligation

   De Maudsley v Palumbo [1996]

Objective v Subjective Test

Objective approach suggested by earlier case

i.e. C bound if reasonable man in D’s shoes would understand information was being given to him in confidence

Coco v Clark [1969]

However later cases have suggested a more subjective approach

i.e. is only obligation where C and D believe an obligation of confidence has been imposed

Thomas v Pearce [2000]

1. Third Party Recipients

   E.g. C gives information to D, who then forwards it to T.

   T bound if he:

1. knew information was confidential

2. was wilfully blind about confidential nature of info

   Thomas v Pearce [2000]

   This case if:

1. T knows information is confidential when he receives it

   AG v Observer (No.2) [1990]

2. C receives information innocently, but later learns it is confidential

   Herbert Smith [1988]

1. Bona fide purchasers

   e.g. where a company buys confidential information without knowing it is confidential.

   where T is a bona fide purchaser for value without notice of information, no remedy available against him

   Tchenguiz [2010]

   earlier case has suggested that where T is bona fide purchaser, court:

1. will grant injunction

2. but will not grant award of damages

   i.e. damages only appropriate if T was on notice that use of information was wrongful

   Valeo Vision [1995]

2. Person Communicating Information

   unclear what case is where person communicating info to T is innocent (i.e. not bound themselves by an obligation of confidence)

   courts often assume T is bound

   i.e. without bothering to investigate whether intermediary knew info was secret

   Prince Albert v Strange [1849]

2. Strangers

• Where T comes into possession of confidential info without having it given to them by anyone owing obligation of confidence.

• Stranger bound by obligation of confidence himself where he comes across info that is “obviously confidential”

  • e.g. a fan blows a confidential paper out of window into street

  • AG v Observer (No.2) [1990] (Lord Goff)

• Will be ‘obviously confidential’ where stranger must have appreciated C had an expectation of privacy in relation to info.

  • Tchenguiz [2010]

• Where stranger behaves in surreptitious manner to obtain information, is proof he knew there was expectation of privacy.

  • Creation Records [1997]

Standing to Sue

Obligation of confidence owed to person who is entitled to have his information treated confidentially.

However obligation may also be shared between C and a third party where third party has paid for right to use the information

i.e. here, obligation has been imposed for benefit of third party as well as C

Douglas v Hello [2008] (Lord Hoffmann)

Lord Hoffmann: “if we keep our eye firmly on the money, is no difficulty”

Arnull (2007): Hello! were bound by obligation merely because they knew the wedding was being kept secret for benefit of OK!

this is radical extension to breach of confidence

i.e. licensees of confidential obligations are entitled to sue recipients of that info

3. BREACH

1. Breach can be deliberate or accidental

   thus D may commit subconscious breach

   Seager v Copydex [1967]

2. Joint information

   e.g. number of people collaborate to generate confidential information, but only one of group (C) wants to go ahead and use it (and others do not)

   whether C permitted to use info depends on nature of relationship between parties

   if information has been created for purpose of facilitating a project, is no breach of confidence by C

   here, info is merely adjunct to relationship between members of group

   thus assumed that anyone free to use it if other members drop out

   Murray v Yorkshire Fund Managers [1998]

   Is usually obvious whether C’s information has been misused or not.

1. Acquisition

   recently suggested that mere examination, copying or supply to a third party of confidential documents constitutes breach of...