Confidential Information
Necessary quality of confidence
Relevant information clearly defined (/definable) by the plaintiff?
Coco v Clark - Three basic elements:
1. Necessary quality of confidence
2. Imparted in circumstances importing an obligation of confidence (*if cant specifically identify the
information you’re talking about, then failed)
3. Unauthorised use of that information to the detriment of the party communicating it (*coco was
not producing anymore, Clark not going to cause Coco commercial detriment)
The action for BoC requires that:
1. a person be identified (Plaintiff/confider)
2. who has disclosed information to another in confidence (confidant/recipient/Defendant)
3. and to whom an obligation of confidentiality can be said to be owed
Actually confidential / in the public domain?
must actually be confidential, cannot be in the public domain or public property
says something is confidential does not make it so – example of limits to NDAs and NDCs
Ø Secret / Public borderline …
Ø Franchi v Franchi: whether publication of a secret process in a patent specification filed in
Belgium had the effect of destroying secrecy in England – held that it did – relied heavily on
the fact that British patent agents typically inspected foreign specifications and would thus be
expected to have learned the details of this process – merely making the information
accessible destroyed secrecy, given the vigilance of the relevant public
Ø Mars UK Ltd v Teknowledge Ltd: ‘reverse engineering’ - no longer be secret, even though
there may be few persons with the required skills and resources
Ø G v Day - actual publication to a large group of people may in some cases not have the effect
of putting information into the public domain – the confidentiality of the plaintiff’s identity
was held not to have been lost by the broadcast of his name on two occasions on a Sydney
television news service, since the references were ‘transitory and brief’ and would mean
nothing to anyone who did not already know him (*even broadcasting to a large amount of
people, can still have relative secrecy)
Ø … Loss of relative secrecy means loss of protection, subject to ‘Springboard Doctrine’
Who is the relevant public?
can be a fairly small group in some circumstances
Is there a commercial or business context?
In business context, it is common for the courts to impose an obligation of confidence,
especially where the parties share commercial information within their business structures –
e.g., common for parties to share sensitive or privileged information within a joint venture or
similar business relationships
, Information ‘relatively secret‘ - Ansell Rubber factor
‘Relative secrecy’ - some reasonable efforts to keep it secrete is enough - machine for making
rubber gloves, some secrecy involves in the machine, employees were told they don’t want
competitors to know and don’t take photos like policy, have windows everyone can access not
complete. An ex-employee started Allied, started making gloves by that machine.
Ansell Rubber factors:
• Extent information known outside business
• Extent information known inside business
• Measures taken to protect the secrecy of the information
• Any express directions that material is confidential
• Level of seniority of people involved
• Industry practice in relation to the information
• The value of the information to the business and competitors
• The amount of effort or money to generate the information
• The ease of acquiring or copying the information
No need for material form but must have some material effect
Onus is on the plaintiff/confider to take care in specifying clearly what is confidential and what
is not – Coco: couldn’t specify what the information they wanted to protect, need to make the
distinction
Is there an NDA or NDC? Could it be invalid?
Restraint of trade as limit to NDAs and NDCs
• General rule that NDAs and NDCs are a strong indicator of necessary quality of confidence
• However, they may be deemed invalid by the courts of they unduly ‘restrain trade’
Ø Maggbury
- Plaintiff had idea for a new design of foldaway ironing board
- While negotiating to exploit the idea the defendants signed NDAs that they would not ‘at
any time hereafter’ make use of the (then secret) information and would ‘forever’ treat it
as confidential (*restraint forever using that information, even once had become public)
- HC: meant that obligation was to persist even after the information was published as a
result of a patent application
- BUT, restriction was subject to the restraint of trade doctrine
- Because plaintiffs had made no attempt at trial to establish the reasonableness of the
restraint, this made it unenforceable
- Could have been possible for the plaintiffs to argue reasonable restraint even for that
period following publication (unfairness of ‘head start’) but did not
- The lesson from this decision is that courts will require clear justification for the imposition
of restrictions on the use of non-confidential information, such that it may be considered
to have the necessary quality of confidentiality
Necessary quality of confidence
Relevant information clearly defined (/definable) by the plaintiff?
Coco v Clark - Three basic elements:
1. Necessary quality of confidence
2. Imparted in circumstances importing an obligation of confidence (*if cant specifically identify the
information you’re talking about, then failed)
3. Unauthorised use of that information to the detriment of the party communicating it (*coco was
not producing anymore, Clark not going to cause Coco commercial detriment)
The action for BoC requires that:
1. a person be identified (Plaintiff/confider)
2. who has disclosed information to another in confidence (confidant/recipient/Defendant)
3. and to whom an obligation of confidentiality can be said to be owed
Actually confidential / in the public domain?
must actually be confidential, cannot be in the public domain or public property
says something is confidential does not make it so – example of limits to NDAs and NDCs
Ø Secret / Public borderline …
Ø Franchi v Franchi: whether publication of a secret process in a patent specification filed in
Belgium had the effect of destroying secrecy in England – held that it did – relied heavily on
the fact that British patent agents typically inspected foreign specifications and would thus be
expected to have learned the details of this process – merely making the information
accessible destroyed secrecy, given the vigilance of the relevant public
Ø Mars UK Ltd v Teknowledge Ltd: ‘reverse engineering’ - no longer be secret, even though
there may be few persons with the required skills and resources
Ø G v Day - actual publication to a large group of people may in some cases not have the effect
of putting information into the public domain – the confidentiality of the plaintiff’s identity
was held not to have been lost by the broadcast of his name on two occasions on a Sydney
television news service, since the references were ‘transitory and brief’ and would mean
nothing to anyone who did not already know him (*even broadcasting to a large amount of
people, can still have relative secrecy)
Ø … Loss of relative secrecy means loss of protection, subject to ‘Springboard Doctrine’
Who is the relevant public?
can be a fairly small group in some circumstances
Is there a commercial or business context?
In business context, it is common for the courts to impose an obligation of confidence,
especially where the parties share commercial information within their business structures –
e.g., common for parties to share sensitive or privileged information within a joint venture or
similar business relationships
, Information ‘relatively secret‘ - Ansell Rubber factor
‘Relative secrecy’ - some reasonable efforts to keep it secrete is enough - machine for making
rubber gloves, some secrecy involves in the machine, employees were told they don’t want
competitors to know and don’t take photos like policy, have windows everyone can access not
complete. An ex-employee started Allied, started making gloves by that machine.
Ansell Rubber factors:
• Extent information known outside business
• Extent information known inside business
• Measures taken to protect the secrecy of the information
• Any express directions that material is confidential
• Level of seniority of people involved
• Industry practice in relation to the information
• The value of the information to the business and competitors
• The amount of effort or money to generate the information
• The ease of acquiring or copying the information
No need for material form but must have some material effect
Onus is on the plaintiff/confider to take care in specifying clearly what is confidential and what
is not – Coco: couldn’t specify what the information they wanted to protect, need to make the
distinction
Is there an NDA or NDC? Could it be invalid?
Restraint of trade as limit to NDAs and NDCs
• General rule that NDAs and NDCs are a strong indicator of necessary quality of confidence
• However, they may be deemed invalid by the courts of they unduly ‘restrain trade’
Ø Maggbury
- Plaintiff had idea for a new design of foldaway ironing board
- While negotiating to exploit the idea the defendants signed NDAs that they would not ‘at
any time hereafter’ make use of the (then secret) information and would ‘forever’ treat it
as confidential (*restraint forever using that information, even once had become public)
- HC: meant that obligation was to persist even after the information was published as a
result of a patent application
- BUT, restriction was subject to the restraint of trade doctrine
- Because plaintiffs had made no attempt at trial to establish the reasonableness of the
restraint, this made it unenforceable
- Could have been possible for the plaintiffs to argue reasonable restraint even for that
period following publication (unfairness of ‘head start’) but did not
- The lesson from this decision is that courts will require clear justification for the imposition
of restrictions on the use of non-confidential information, such that it may be considered
to have the necessary quality of confidentiality
