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Lionel Bently
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
4 Lectures
1. The Basic Framework 2. Ctd. Plus Difficult Issues (jurisdiction, justification) 3. Employees 4. Privacy and Publicity Rights.
Todays lecture
Historical Origins The Components of the Classic Action: Coco v A.N. Clark [1969] RPC 41; AG v. Guardian (No. 2)[1990] 1 AC 109 (HL)
Historical origins
Form of information
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:
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...
considerable degree of particularity in a definite product needs to be shown to be the result of the mental process in question. That does not of course exclude simplicity.
In context of employment case-law, a factor in deciding whether information reaches higher standard of being a trade secret
Losing Secrecy
Quality of secrecy is lost by publication: AG v Guardian (No 2) [1990] 1 AC 109 per Lord Goff
But Douglas v Hello! [2008] 1 AC 1 (the difference between Hoffmann (para 122)/Brown (para 329) and Nicholls (para 257-259) and Walker)
Dosen had been involved in invention of machine for making fish-hooks. M, assignee of confidentiality obligation, sought injunction against Dosen and his new employer. M patented the machine in UK. The CA and HL refused injunctive relief. Atkin LJ: that which before might have been a trade secret, was a trade secret no longer Lord Buckmaster: the secret as a secret had ceased to exist.
Is accessibility sufficient?
I ... ask whether the identity of The Stig is so generally accessible so that, in all the circumstances, it can no longer be regarded as confidential. In my judgment, the press coverage, in particular the press coverage in August 2010, goes well beyond speculation as to the identity of The Stig. The statements in the press that
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, 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. ...
Reverse Engineering
Mars v. Teknowledge [2000] FSR 138
(owner entitled to dismantle, so encrypted information in claimants
a person who has obtained information in confidence is not allowed to use it as a springboardand 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.
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, that seem to inhibit use of even public domain material if it is conveyed in circumstances that aspire to confidence
Disclosure for limited purpose: Coco [1968] FSR 415, 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.)
Third Parties
(a) when the information was received (AG v Guardian (No 2) [1990] AC 109, 260 per Lord Keith) (b) later.
But
(a) position of bona fide purchaser unresolved (Tchenguiz, [2010] EWCA Civ 908, para 74: claimant will prevail unless bfpwn) (b) Possible differentiation in relation to remedy: Valeo Vision [1995] RPC 205 (no damages unless knew) (c) Courts have yet to clarify precisely the knowledge concept
Strangers?
Lord Walker (para 292) the law took an important step forward in Spycatcher
If confidence applies to a defendant who adventitiously, but without authorisation, obtains information in respect of which he must have appreciated that the claimant had an expectation of privacy, it must, a
and knowing that the claimant reasonably expects it to be private, is itself a breach of confidence.
To Whom Owed?
Arnold (2007) EIPR 339, 343: the effect of it will be to give many exclusive, and indeed nonexclusive, licensees of confidential information a right of action. Whether this is a good thing or not remains to be seen.
Breach
Innocence: Seager v Copydex (subco nscious copying of carpet-grip idea nevertheless a breach)
Maudsley v Palumbo [1996] FSR 447 (no liability where used only 2
of 5 components of idea all night, separate dancing areas -, esp. in light of Ds additional features no alcohol/over 21a)
Is acquisition a breach?
[69] In our view, it would be a breach of confidence for a defendant, without the authority of the claimant, to examine, or to make, retain, or supply copies to a third party of, a document whose contents are, and were (or ought to have been) appreciated by the defendant to be, confidential to the claimant.
confidence as to the disclosure of an iniquity. You cannot make me the confidant of a crime or fraud
Developments (overview)
Art 10 freedom of expression, the right to receive and impart information London Regional Transport v Mayor of London [2001] 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
Disclosure of matters carried out or contemplated, in breach of the countrys security, or in breach of law, including statutory duty, fraud, or otherwise destructive of the country or of its people, including matters medically dangerous to the public; and doubtless other misdeeds of similar gravity
Public Interests
Factors
Strength/nature of obligation Nature of Breach To Whom Disclosed (proper authority: reflect idea that should
Eady J. on facts, not Nazi. Had it been, there may have been public interest justifying disclosure to FIA.
Freedom of Information act exempts from disclosure information disclosed in confidence (s.41), trade secrets (s.43, subject to public interest test)
Application to procurement contracts: in general contractual information not regarded asdisclosed. So disclosure subject to weighing under s. 43
(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 [1996] FSR 273
(Laddie J, reinterpreting AC so as supporting flexible approach so as to enable the court to take account of strength of parties cases as one factor)
"(1) This section applies if a court is considering whether to grant any relief which, 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.
(4) The court must have particular regard to the importance of the Convention right to freedom of expression and, where the proceedings relate to material which the respondent claims, or which appears to the court, to be
journalistic, literary or artistic material (or to conduct connected with such material), to - (a) the extent to which - (i) the material has, or is about to, become available to the public; or (ii) it is, or would be, in the public interest for the material to be published; (b) any relevant privacy code.
favourable', 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
Jurisdictional Debate
Why might it matter? Third parties; remedies; limitation; private international law.
[121] I can see no reason...why valuable commercial confidential information, ..., cannot fall within the concept of "possessions [within Art 1, Protocol 1 of ECHR].
Seager v Copydex [1967] 2 All ER 415 Malone v. Metropolitan Police Commissioner [1979] Ch 344, 360 (only remedy is account where no
injunction would issue)
Discussion of exemplary damages (para 172-211 (rejects) Recognises that compensatory damages can include damage for distress, hurt feelings or loss of dignity. (para 216)
as Peoples Cash, and, with P, worked up a business plan for Project Scrooge. But V&S needed venture capital. Approached RFML in Sept 2003, with NDA, and a further contract in Nov.
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). RFML had doubted P from before Sept 2003, but did not tell until Mar 2004, when offered $30k. RFML envisaged Vs involvement, but N, a key figure at H&T, who was to be retained as MD, disliked V. In July relations broke down.
RFML developed H&T before selling off at profit of 29m. Did not use business plan. Held: breach of contract and confidence. What remedy?
Breach of Contract: paras 288-9. 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.
Breach by RFML: where contract defines, contract prevails (para 329) Others involved were aware of contracts. Could P&V get account? No. 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, or commercial contract) (para 344). Here contract-like.
Justifications
o
Some elements created, but some not (just information eg customers, 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)
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 fraudshould be punishable
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. Bob Bone, 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. Rather, trade secret law is merely a collection of other legal norms contract,
fraud, and the like united only by the fact that they are used to protect secret information. 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. Trade secret law is in this sense parasitic: it depends on a host theory for normative support. (245)
o
With this insight, much of trade secret law becomes comprehensible[but] much of its doctrinal structure becomes difficult to justify. (246)