Cases

Douglas and others v Hello Ltd and others
[2005] EWCA Civ 595 (18 May 2005)
Campbell v MGN Ltd
[2004] UKHL 22 (6 May 2004)

Michael Barrymore v News Group Newspapers Ltd.
[1997] FSR 600
Coco v A N Clark (Engineers) Ltd.
[1969] RPC 41.
Faccenda Chickens Ltd. v Fowler
[1987] Ch 117.

Confidential Information

A person who receives valuable or sensitive secret information in confidence ("confidential information") owes a duty known as "a duty of confidence" neither to disclose nor make use of that information for any purpose other than that for which the disclosure was made without the consent. Should the receiver of such information ("the confidante") threaten to do so, the person who imparted it to him or her is entitled to an injunction to restrain such unauthorized use or disclosure.

Confidential Information
The following are a few examples:

	Trade Secrets: formulae, recipes, production methods, source codes, test results and other information obtained by research or other work;
	Business Secrets: budgets, customer lists, marketing plans and other information the release of which would be advantageous to a competitor and injurious to the claimant;
	Personal Information: diaries, photographs, private information about public figures the disclosure of which could be profoundly embarrassing; and
	Professional Information: information supplied to a solicitor, accountant or other professional advisor in the course of his or her professional duties.

Circumstances in which the Obligation arises

The confidante must receive the information in confidence. That means that he or she must be asked to treat the information as confidential or it must be obvious to him or her that the information is given in confidence. The best way to do that is to ask the confidante to sign a confidentiality agreement. That is not in itself enough. Precautions must be taken (and seen to be taken) to keep the information secret such as logging documents and disclosures, keeping materials under lock and key and extracting confidentiality agreements. Merely inserting a confidentiality clause into a contract of employment may not always be enough.

Duty of Fidelity
A duty of confidence is often confused with an employee's duty of fidelity. The two duties are related because confidential information is often disclosed in the workplace but they are distinct. An employee must serve his or her employer faithfully for so long as he remains on the payroll. That means that he or she may not disclose any information about his work that might benefit a competitor. That does not mean that the information is confidential and the employee is usually free to use skills and knowledge that he or she gained with another employer.

Limits
Information remains confidential only so long as it is secret. If the person to whom the duty is owed publishes the information or otherwise puts it into the public domain by marketing a product made from a secret process that can easily be reverse engineered it ceases to be confidential. There are a number of other circumstances in which the obligation of confidence will end. For example, disclosure may be ordered or permitted by a court where it is adjudged to be in the public interest.

Term
It is sometimes possible to keep a trade secret such as a recipe or a production process out of the public domain indefinitely. So long as the information remains secret the obligation of confidence continues.

Relations with Other Rights
New products and production processes may be patentable. Copyright or unregistered design right may subsist in new designs. Copyright certainly subsists in the code of a computer program. The structure of a database may be protected by copyright and its contents by database right. Access to, the integrity and use of personal data is protected by the Data Protection Act 1998.

Applicable Law
The law of confidence is to be found in the cases. A common starting point is Megarry J's judgment in Coco v A N Clark (Engineers) Ltd. [1969] RPC 41. The Court of Appeal set out the basic principles relating to employment in Faccenda Chickens Ltd. v Fowler [1987] Ch 117.

Enforcement Proceedings
An action for breach of confidence is usually brought in the Chancery Division of the High Court but it can also be brought in the Queen's Bench Division (particularly in an employment case and sometimes the Mercantile or Technology Courts) or any county court. The same is true of Northern Ireland. In Scotland these cases are brought in the Court of Session. Like any other dispute, there is no reason why the parties should not refer the issue to arbitration and the Patents County Court maintains an arbitration panel for that purpose.

Competition
The Competition Act 1998 and the Treaty of Rome regulate the exercise of all intellectual property rights including technology transfer agreements and know-how licences. Both the Act and Treaty prohibit:

	agreements between undertakings, decisions by associations of undertakings or concerted practices which may affect trade within the United Kingdom or, as the case may be, the common market, and have as their object or effect the prevention, restriction or distortion of competition within that area unless exempted in accordance with the Act or Treaty as the case may require; and
	conduct on the part of one or more undertakings that amounts to the abuse of a dominant position in a market if it may affect trade within the United Kingdom or common market.

Common Law Restraints of Trade