Confidential Information

Can you keep a Secret? Are you sure? Managing Confidential Information

 

Yatoni Cole-Wilson

Nov 1998

Updated 24 Dec 2005

This case note first appeared on the Lancaster Buildings website

An obligation of confidence arises whenever secret technical or commercial information is disclosed to another in circumstances giving rise to an obligation of confidence.1 Despite its clarity, this principle is not always easy to enforce. Typical defences are that there was no disclosure, the information was already in the public domain or the confidant did not appreciate that the information was confidential.
Each and every one of those defences could be pre-empted by prudent information management.

A Secret is a Secret

The law of confidence does not protect all unpublished technical or commercial information, only that which is of commercial value. Information of commercial value such as new product formulations should be restricted to those directly engaged in developing them. Even they should be allowed access to the information that they actually need. Drawings and other hard copy should be marked with the words "Secret" or "Confidential" numbered or otherwise catalogues and kept under lock and key when not in use. Computer records should be held in computer files to which access is restricted. Passwords or other keys should for each level of security be changed frequently and given only to the personnel who need access to the data. The need for secrecy should be explained to every employee. He or she should be trained to look for security lapses and commended or otherwise rewarded if any are found.

Confidentiality Acknowledgements
Should it be necessary to disclose a document to an employee, agent, contractor or other confidante, the proprietor of the information should ask the confidante to sign a simple acknowledgement containing:

	the date of the disclosure;
	the full name, postal address, telephone and fax numbers of the confidante;
	the number and title of the document disclosed;
	the purpose of the disclosure;
	the date upon which it is to be returned, and
	an acknowledgement by the confidante that the document is confidential and that it is disclosed only for the specified purpose and a promise not to copy, use not divulge the contents and to return it by a stated day.

A refinement is to require the confidante to notify the proprietor within a specified time if he has reason to believe that the contents are already in the public domain or otherwise not confidential. A similar acknowledgement may be used where information is disclosed orally. The name of the person divulging the information, the subject of the disclosure, and the date, time and the place of the meeting should be recorded. Each confidentiality acknowledgement should be numbered and signed in
duplicate. One copy should be given to the confidante and the other retained by the proprietor who will register the number of the acknowledgement and its particulars a log.

Enforcing the Duty of Confidence

Should a claimant require an interim injunction to restrain his confidante from using or disclosing information that he has imparted, the court will be far more inclined to grant him one if he can produce a signed acknowledgement from the confidante identifying the information and the date, time, place and purpose of the disclosure. A confidante who had an opportunity to notify the proprietor that the information was already known to him, in the public domain or otherwise not confidential at the time of the disclosure will be much less likely to resist an application for an injunction on that ground.

Conclusion

Information management assists companies to meet other legal requirements such as preventing unauthorized access or disclosure of personal data. It would prompt regular review and updating of a company's know-how portfolio. Thought would be given constantly to other or better ways of protecting or exploiting the technology. It requires a change of routine but the cost savings and other benefits are well worth it.

 

Important