Both the courts and businesses through specific clauses in contracts aim to protect confidential information. Unlike other types of intellectually property protection, however, there is no single piece of legislation which contains the rules surrounding confidential information. Rather, the case of Coco v A.N.Clark (Engineers) Ltd [1969] R.P.C. 41 (Coco v Clark) sets out the three factors needed to establish a breach of confidence.  

1. The Information is Confidential

The information must be confidential in nature to meet this requirement. In other words, the information must not be in the public domain or common knowledge. There are exceptions, however, including:

  • sharing the design or blueprint for a novel invention that has been put together using materials that are all in the public domain; and
  • sharing confidential information that the owner has published, where the recipient received the information before the publication.

The recipient of confidential information will generally have an obligation not to use information shared in confidence to gain a head start on competitors.

2. The Owner Shared the Information in Confidential Circumstances

There is no obligation on recipients of confidential information to keep it a secret where the owner has shared it publicly. For example, if the CEO of a startup delivered a public talk on a new design, the courts would not consider the information conveyed in that talk to impose an obligation of confidence (i.e. share the information in a confidential setting).

Courts determine whether circumstances impose an obligation of confidence by reference to the ‘reasonable man’. That is, if a reasonable person would have realised that the owner was sharing confidential information given the circumstances, then this element is satisfied.

In the context of business, it is common for the courts to impose an obligation of confidence, especially where the parties share commercial information within their business structures. For example, it is common for parties to share sensitive or privileged information within a joint venture, which they do not want to disclose to the public.

3. The Recipient Used the Information to the Owner’s Detriment

The case of Coco v Clark demonstrates the requirement that the recipient uses the information to the owner’s detriment. Here, the plaintiff had designed a motorcycle incorporating many unique engine parts. He had worked with a manufacturer in an attempt to bring the design to the marketplace but had to abandon the project due to a problem with the tyre.

The manufacturer decided to go ahead with a new design, which incorporated several elements that were the same as that of the plaintiff’s. The Court held that the plaintiff would suffer a detriment as the manufacturer would be the sole beneficiary of the plaintiff’s hard work.

Further, an owner can also satisfy this requirement where they are not directly adversely affected. For example, harm can also occur to a third party, such as a family member or close friend.

Key Takeaways

Protecting confidential information is important where you have intellectual property which you can monetise such as trade secrets and unpatented commercial inventions. Where you believe another party has breached your confidence, the courts will require you to prove the three elements set out in Coco v Clark.

It was always advisable to take proactive measures to protect your confidential information. If you require a confidentiality agreement drafted, get in touch with our specialist contract lawyers on 1300 544 755.  

COVID-19 Business Survey
LegalVision is conducting a survey on the impact of COVID-19 for businesses across Australia. The survey takes 2 minutes to complete and all responses are anonymous. We would appreciate your input. Take the survey now.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.

The majority of our clients are LVConnect members. By becoming a member, you can stay ahead of legal issues while staying on top of costs. For just $199 per month, membership unlocks unlimited lawyer consultations, faster turnaround times, free legal templates and members-only discounts.

Learn more about LVConnect

Vee Naidoo
Need Legal Help? Get a Free Fixed-Fee Quote

If you would like to receive a free fixed-fee quote or get in touch with our team, fill out the form below.

  • By submitting this form, you agree to receive emails from LegalVision and can unsubscribe at any time. See our full Privacy Policy.
  • This field is for validation purposes and should be left unchanged.
Our Awards
  • 2019 Top 25 Startups - LinkedIn 2019 Top 25 Startups - LinkedIn
  • 2019 NewLaw Firm of the Year - Australian Law Awards 2019 NewLaw Firm of the Year - Australian Law Awards
  • 2020 Fastest Growing Law Firm - Financial Times APAC 500 2020 Fastest Growing Law Firm - Financial Times APAC 500
  • 2020 AFR Fast 100 List - Australian Financial Review 2020 AFR Fast 100 List - Australian Financial Review
  • 2020 Law Firm of the Year Finalist - Australasian Law Awards 2020 Law Firm of the Year Finalist - Australasian Law Awards
  • Most Innovative Law Firm - 2019 Australasian Lawyer 2019 Most Innovative Firm - Australasian Lawyer
Privacy Policy Snapshot

We collect and store information about you. Let us explain why we do this.

What information do you collect?

We collect a range of data about you, including your contact details, legal issues and data on how you use our website.

How do you collect information?

We collect information over the phone, by email and through our website.

What do you do with this information?

We store and use your information to deliver you better legal services. This mostly involves communicating with you, marketing to you and occasionally sharing your information with our partners.

How do I contact you?

You can always see what data you’ve stored with us.

Questions, comments or complaints? Reach out on 1300 544 755 or email us at

View Privacy Policy