The Law of Confidence
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24 October 2008
The Law of Confidence in the UK is an important right and is well recognised
in the English Courts and in the world of Intellectual Property. It can be
summarised as follows:
(1) The right can arise out of a contract whereby one party ("the confidant
") undertakes that he will maintain the confidentiality of information directly
or indirectly made available to him by the other party ("the confider ") or
acquired by him in a situation, e.g. his employment, created by the confider. It
can also arise as a necessary or traditional incident of a relationship between
the confidant and the confider, e.g. lawyer and client, husband and wife.
(2) As a general proposition, that which has no character of confidentiality
because it has already been communicated to the world, i.e., made generally
available to the relevant public, cannot thereafter be subjected to a right of
confidentiality: However, this will not necessarily be the case if the
information has previously only been disclosed to a limited part of that public.
It is a question of degree. Furthermore, if the confidant could by great
exertion have acquired the information for himself, but the confider is in fact
the source of the confidant's knowledge, the law may confer a right of
confidentiality unless and until the information is acquired by the confidant
from other sources.
(3) Since the right to have confidentiality maintained is an equitable right,
it will (in legal theory and practical effect if the aid of the court is
invoked) "bind the conscience" of third parties, unless they are bona fide
purchasers for value without notice.
(4) The right will be lost or, at all events, the courts will not uphold and
enforce it, if there is just cause or excuse for communicating the information
in circumstances which would otherwise constitute a breach of the right.
(5) However the nature and degree of the communication must be proportionate
to the cause or excuse. Thus communication to those who have a duty to receive
and act upon the information may be justified in circumstances in which
indiscriminate communication would not.
(6) The right will also be lost if the information, which is subject to a
right of confidentiality, is published to the world by or with the consent of
the confider, but it will not necessarily be lost if such publication is by or
with the consent of the confidant.
(7) There is an inherent public interest in individual citizens and the state
having an enforceable right to the maintenance of confidence. Life would be
intolerable in personal and commercial terms, if information could not be given
or received in confidence and the right to have that confidence respected
supported by the force of law. (8) It is standard business practice for
confidentiality agreements to be entered into when you seek to disclose your
invention or idea.
When would I need to consider confidentiality?
a) If you are disclosing information about your business and commercial
affairs.
b) If you have any technical information, concerning manufacturing know-how.
c) Information developed under a contract. This could be a duty of
confidentiality on (i) party B to keep confidential information developed by
party A, and vice versa, or (ii) party B to keep confidential information
developed by it, and only to disclose it to party A (eg if party B has been
commissioned to carry out work on behalf of another). (iii) both parties to keep
confidential information developed by either of them under the agreement.
How to ensure your information remains confidential? When information
is to be regarded as confidential information; effectively, this is left for the
court to determine. The main options when addressing this issue are: (i) to
state that all information disclosed by one party to the other, whether in
writing, verbally or otherwise, is to be kept in confidence unless otherwise
agreed; or (ii) to state that only information disclosed in writing and clearly
marked as confidential is caught by the confidentiality provisions; or (iii) to
state that written information must be marked confidential, and orally disclosed
information must be stated to be confidential at the time of disclosure; or (iv)
to state that information disclosed orally must be reduced to, or confirmed in,
writing within a certain time and will be confidential when so put in writing.
a) Confidential information may only be used for defined purposes, set out in
the agreement. A restriction on use is sometimes forgotten in confidentiality
provisions, yet it can be very important. b) The confidentiality provisions may
be stated to survive termination of the agreement, either for a defined period
of time or indefinitely. Thus, there is a wide range of issues that may need to
be addressed in a confidentiality clause. Some of these will be specific to the
contract, and cannot be regarded as general boilerplate clauses.
For example, in a research contract, there may be a provision allowing the
researchers to publish scientific papers about the project, subject to certain
safeguards to protect intellectual property.
Jody Tsigarides is a Trainee Solicitor who specialises in Intellectual
Property law (trade marks, copyright and design rights) jody.tsigarides@lawdit.co.uk
About the Author
Lawdit Solicitors offer
services and advice for litigation, commercial contracts, Intellectual Property
and IT legal agreements. We are experts in commercial law with a heavy emphasis
on Intellectual Property, Internet and e-commerce law. Lawdit is a member of the
International Trademark Association, the Solicitors' Association of Higher Court
Advocates and we are the appointed Solicitors to the largest webdesign
association in the world, the United Kingdom Website Designers Association.
