The Law of Confidence

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.

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