During the course of running your business your directors, partners, employees or contractors will likely handle information you would prefer to be kept out of reach from your competitors and other parties.
The extent of your commercial success could hinge on this type of information remaining secret. It is therefore important you take robust steps early on to ensure such information is kept secure and your employees and parties with whom you contract are made aware of its commercial sensitivity and confidential nature.
In certain circumstances, where certain parties disclose confidential information you may be able to pursue them for a claim for breach of confidence.
What is breach of confidence?
In broad terms for a breach of confidence claim to succeed the following three elements need to be established:-
- The information itself must have the necessary quality of confidence; and
- The information must have been imparted in circumstances importing an obligation of confidence (i.e. imposed by an employment contract); and
- There has been an actual or threatened unauthorised use of that information to the detriment of the party who owns the information.
So, what exactly is confidential information?
Confidential information can take many forms. It can typically include detailed business plans, complex and commercially valuable databases which your business has created over time and trade secrets (i.e. a highly guarded recipe for a food or drink product).
For information to be confidential it must have the “necessary quality of confidence”. Generally speaking in order to pass this test the information must:-
- Not already be in the public domain; and
- Be clear and ascertainable (ideally it should be clearly documented in precise terms); and
- Have a commercial value; and
- Not be common knowledge or simply trivial useless information.
How we can help you
We provide our clients with strategies to implement in order to mitigate the risk of confidential information being passed to unintended parties and competitors in the first place.
This may include for example:-
- Advising on the terms of Confidentiality Agreements (or non-disclosure agreements, “NDAs”) and appropriate restrictive covenants.
- Auditing your confidential information and trade secrets and how they are stored (physically an electronically).
- Assisting you implement measures to limit the number of parties within your business from accessing the information.
- Helping you create an action plan in the event the information is misappropriated.
Our advice focuses on maximising the likelihood of successfully bringing a breach of confidence claim should that information then happen to be passed to your competitors or another party.
Where the information has already been communicated to another party, we can help commence breach of confidence claims where we assess there are reasonable prospects of success. Likewise, we can help businesses and individuals defend breach of confidence claims.