Over the coming weeks we will explore the topic of breach of confidence. Our discussions will focus primarily on how the requirements of confidentiality can protect your intellectual property but some concepts also have broad commercial applicability (e.g. the execution of a confidentiality agreement or inclusion of a non-disclosure clause). Last week we continued to examine action for breach of confidence by looking at when confidential circumstances arise. The last part of this series will recap the content from previous weeks.

Obligations of Confidentiality Under Contract

If you are disclosing information to another party, and you want such information kept confidential, it is prudent to execute a confidentiality agreement. This contract would set out in writing the parties’ obligations to keep certain information confidential. Where possible, you should specify the type of confidential information divulged, and whether the recipient is permitted to use such confidential information for a specific purpose. Any prescriptions should be carefully crafted to ensure the confidential information is adequately protected and both parties understand their rights and obligations.

Breach of Confidence

If confidential information is disclosed (and is not protected under contract), there may still be an obligation of confidence between the parties. This obligation is termed breach of confidence and falls under the court’s equitable jurisdiction.

There are three essential elements to establish breach of confidence. These are:

  • the information must have a necessary quality of confidence about it;
  • the information must have been imported on circumstances importing an obligation of confidence; and
  • there must be an unauthorised use of the obligation.

For a more detailed discussion, please see our article on elements to breach of confidence. Further, the information must have sufficient specificity and be protectable information.

Conclusion

Confidential information is a broad term that can encompass different kinds of information. However, obligations of confidentiality can apply not only to intellectual property but also to other business or commercially sensitive information and know-how. The information must be disclosed in circumstances giving rise to the requirement of confidentiality. The test to determine whether confidential circumstances exist can be quite broad and difficult to determine, subject to court rules.

Executing a confidentiality agreement, or including a confidentiality clause in a relevant agreement can assist with protecting confidential information and avoid seeking court enforcement to enforce obligations of confidence. It is a useful document clarifying the rights and obligations of both the discloser and recipient of confidential information. It is very prudent to have any agreements regarding confidentiality be in written form. Our team of lawyers have extensive experience in this area and would be happy to assist. To speak with one of our lawyers today, contact LegalVision on 1300 544 755.

Daniel Smith

Next Steps

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