Many of our clients come to us asking about the limits of what can be regarded as “confidential information“. Given this term is used on a regular basis in a variety of contexts, it is no wonder there is much confusion about its exact meaning. So what are the legal implications of the term, and what information is really protectable information? What is the best way to protect confidential information, and what are the best practices for dealing with the disclosure of such information? This article will traverse the legal ramification of confidential information, and give an overview of what can and cannot be protected under the law.

Confidential Information

In an action for breach of confidence, the purported confidential information must be identifiable, have some form of originality and not import public knowledge. In essence, you must be able to identify the information with sufficient specificity, more than mere use of broad or global terms. Breach of confidence may have difficulty establishing how a concept should be protected as part of confidential information, particularly if there are no associated details as to how such a concept can be developed. Further, an obligation of confidence may not readily exist to all kinds of information.

Trade Secrets

The broad umbrella term of intellectual property often encompasses the term trade secrets. Nevertheless, there is no strict legal definition for trade secrets. Instead, the term generally refers to category of information relating to a subject matter of commercial value. Again, this relates to information of specificity in order to have the necessary quality of confidence. Typical examples of trade secrets may include processes, designs, customer lists, commercial secrets and know-how.

Personal Information

Whether there is also an equitable action for breach of confidence in relation to personal information is less clear. At issue here is that, unlike commercial information, disclosure of confidential personal information is likely to result in emotional distress, not economic loss. The question then becomes: what are the appropriate remedies for this situation? An injunction may stop parties from further divulging the personal information, but it will not cure the emotional distress. Whether the court will grant damages for emotional distress resulting from breach of confidence is also unclear. Generally, the use and disclosure of personal information is governed by statute under the Privacy Act 1988 (Cth).

Government Information

Government, like other entities and individuals, can also rely on the equitable action of breach of confidence. However, considerations of confidentiality will be weighed against considerations of public interest. Separate to any rights under confidentiality, Government organisations are also subject to disclosure requirements under the Freedom of Information Act 1982 (Cth).

Conclusion

The scope of information that is considered protectable information is broad and covers a range of topics. One important thing to remember is that confidential information does not simply apply to intellectual property. It can also extend to things like know-how of a business and valuable client lists. For a disclosure to be considered a breach of another party’s confidentiality, it must take place in a context that would give rise to a requirement of confidentiality, which is a tricky threshold to determine and one which is subject to court rules.

If you need assistance in drafting a Confidentiality Agreement, or a clause which covers the protection of your confidential information, get in touch with LegalVision on 1300 544 755.

Daniel Smith

Next Steps

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