• Confidential Information protects information, or more accurately, secret information, by protecting the relationship in which the information is disclosed.
  • A confidentiality agreement is used in some different relationships. For example, stopping employees from revealing secret knowledge during and after employment.
  • To establish liability, the information has to have the necessary quality of confidence, have the necessary obligation of confidence, and there must have been unauthorised use of confidential information.

Confidential Information Protection

Confidential information can be protected through the action of breach of confidence. Confidential information is protected through what is termed an equitable cause of action, and so it is not a property right as such (e.g. it is not a right that can be assigned or licensed to others). This form of protection arises for the nature of the information itself, the relationship between the parties, and the circumstances in which the information is disclosed.

Action for Breach of Confidence

There are four elements that will be sufficient to establish a breach of confidence apart from obligations arising under contract, fiduciary obligation, tort, etc.

  1. The information to be protected as confidential can be accurately and precisely identified.
  2. The information itself must ‘have the necessary quality of confidence about it.’
  3. The information must have been originally disclosed in circumstances importing an obligation of confidence; and
  4. There must be an unauthorised use of that information to the detriment of the party communicating it.

Key Considerations

  • Evidence of use of your trade mark is often confidential because it can include sales figures, costs and business information. This information is used to overcome an objection to your trade mark. Documents that solely contain evidence of use submissions will not be made available for public inspection.
  • Categories of confidential information include commercial secrets, private secrets, government information and professional information.
  • A trade secret is secret information that is confidential to the employer.

Contractual Protection of Confidential Information

Public Knowledge v Confidential Information

The factors to be considered in distinguishing between public knowledge and confidential information include:

  1. The extent to which the information is known outside the employer’s business
  2. The extent to which it is known by employees and others involved in the business.
  3. The measures taken to guard the secrecy of the information
  4. The value of the information to the plaintiff and their competitors
  5. The amount of effort or money expended by him in developing the information
  6. The ease or difficulty with which the information could be properly acquired or duplicated by others.

Employment Relationships

The obligations of confidentiality extend beyond the employment relationship. However, while employed the employee is under a duty to serve their employer faithfully, which includes being bound not to damage the employer’s interests by disclosing or using any information acquired in the course of employment. The only exception is where information is revealed in the public interest to the proper authorities

International Protection of Confidential Information

Confidential Information is covered by the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS), Article 39 which requires protection for information “that has commercial value because it is secret.”

Frequently Asked Questions about Confidential Information

Q: What can be protected?
A: Ideas, unpatentable or unpatented inventions, technical know-how, customer information, formulae, recipes, and organisational information, often not otherwise protectable through other forms of Intellectual Property rights, are just some of the types of information that can be kept confidential.

Q: How secret does information have to be?
A: This will depend on the circumstances of each case. Strict secrecy is not required, but it has to be unknown to the relative ‘public’ who would be interested in or to whom release would affect the commercial or other value of the information.

Q: How can a breach occur for confidential information?
A: Generally to bring an action for breach of confidence you must have disclosed the information originally or have reasonably relied upon the confidential nature of the information

Q: Are there any defences for breaching confidential information?
A: Liability for breach of confidentiality may be avoided where the Defendant has “just cause and excuse” for disclosing the information. However, it is not clear what circumstances meet this standard. It is accepted that disclosure of an ‘iniquity’ i.e., crime, or breach of other legislative or common law requirement, will not lead to a breach of confidence.

Q: What remedies are available for breaches of confidentiality?
A: As well as injunctions a breach of confidence may be remedied through the award of damages. The basis of the damages is the compensation needed to restore someone to the position they would have been in if the breach of confidence had not occurred.

How can LegalVision help me?

LegalVision assists businesses and individuals with tailored online legal advice for a fixed-fee, including how to draft non-disclosure agreements or confidentiality agreements. Call LegalVision today on 1300 544 755.

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