Confidential Information protects secret information by protecting the relationship in which you disclose the information.

A confidentiality agreement, or non-disclosure agreement, is one way you can protect your information in certain relationships.

For example, in the employment context, you can stop employees from revealing secret knowledge they acquired during and after employment.

Confidential Information Protection

Confidential information has legal protection through an ‘equitable cause of action’. Essentially, this means that it is not a property right. As such, it is not a right that you can assign or license to others. There are a few factors to consider when deciding whether this form of protection applies to your circumstances.

For example, these include the: 

  • nature of the confidential information;
  • relationship between the parties; and 
  • surrounding circumstances which led you to disclose the information.

Action for Breach of Confidence

A basic requirement for the protection of confidential information is that the information is ‘confidential’, meaning that it is not available to the public. There are four elements that will together establish a breach of confidence. Namely, a breach of confidence will have occurred where:

  1. you are able to accurately and precisely identify the information to be protected as confidential;
  2. the information itself has the necessary quality of confidence about it;
  3. you originally disclosed the information in circumstances importing an obligation of confidence; and
  4. there was an unauthorised use of that information to the detriment of the party communicating it.

Sometimes, the law requires the disclosure of information. For example, this may be the case during a court proceeding. Here, the disclosed information must only be used for the purposes of the court proceeding. In this instance, the court may make orders that the information remains confidential.

Key Considerations

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

Contractual Protection of Confidential Information

Public Knowledge Vs. Confidential Information

The factors to consider in distinguishing between public knowledge and confidential information include the:

  1. extent to which the information is known outside your business or known within a particular industry;
  2. extent to which the information is known by employees and others involved in the business;
  3. measures you have taken to guard the secrecy of the information;
  4. value of the information to you and your competitors;
  5. amount of effort or money you have spent in developing the information; and
  6. ease or difficulty with which others could properly acquire or duplicate the information.

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. For example, this includes not: 

  • damaging the employer’s interests by disclosing or using any information the employee acquires in the course of employment; and
  • not misusing the employer’s information, trade secrets and confidential information to the detriment of the employer.

The only exception is where the employee reveals information 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). TRIPS is an international legal agreement between the members of the World Trade Organisation (WTO). The WTO is an international body that specifies rules around international trade. TRIPS outlines the minimum standards that governments must abide by in terms of IP. Under this agreement, your confidential information has further protection in the international space, so long as the confidential information has commercial value because it is a secret.

Frequently Asked Questions about Confidential Information

What can I protect?

You can protect ideas, unpatentable or unpatented inventions, technical know-how, customer information, formulae, recipes and organisational information. These are just some of the types of information that you may need to keep confidential.

How secret does information have to be?

This will depend on the circumstances of each case. Generally, you do not need strict secrecy. However, it has to be unknown to the relative ‘public’ who would be interested or to whom release would affect the commercial or other value of the information.

How can a breach occur for confidential information?

To bring an action for breach of confidence, you must have initially disclosed the information or have reasonably relied upon the confidential nature of the information.

Are there any defences for breaching confidential information?

If you have disclosed confidential information, you may not be held liable if you had ‘just cause and excuse’ for disclosing confidential information. Each case is different, so the court will look at your individual circumstances to determine if you meet this standard. If you have disclosed confidential information in the process of reporting a crime or breach of another law, the court will not hold you liable to a breach of confidence. 

What remedies are available for breaches of confidentiality?

As well as injunctions, you may be able to remedy a breach of confidence through the award of damages. The basis of the damages is the compensation you would need to restore yourself to the position you 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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