CONFIDENTIAL INFORMATION

The law of confidential information grants one of the broadest forms of protection of material in the suite of rights related to intellectual property. A duty to maintain information as confidential arises automatically by operation of law where the circumstances of the passing of the information regardless of form may be reasonably expected. It may also arise by agreement, such as where non-disclosure has been agreed by two or more people, such as non-disclosure agreements with consultants, employees or trading partners.

This right to require a third party to keep information confidential often offers broader protection than other forms of intellectual property rights as it is a right that disregards the form of the information. The key questions are whether the limited number of people are aware of the information, and whether the person receiving the information ought reasonably suppose that the information should remain secret. The rights of employees to apply their skills and experience gained during the course of their employment is a significant exception to the restriction to use confidential information. This exception however does not extend to processes or products that are the trade secret of a company.

Permitted Uses and Restrictions on Use

The use of confidential information is something that should be incorporated in employment contracts to avoid the problem for small business where employees leave and establish competing businesses. These restrictive covenants may not be perpetual. Such a restriction would amount to an unlawful restraint of trade and not be enforceable. The protections gained by restrictive covenants however may be reasonable. The meaning of reasonable, in the context of the length of time that an employee may not work in a particular industry or geographical location, are determined by the circumstances of the parties when the employment contract was signed. Without these rights, employers expose themselves to unnecessary risks that may be protected by the law.

What is the difference between OFF THE RECORD, CONFIDENTIAL AND WITHOUT PREJUDICE?

The use of the particular marking or statement is critical. Many companies do not understand what the various meanings are and believed that they are protected when this is not the case.

Strong Protections

a) Privileged: May be disclosed by the Client against the Solicitor or may be used by the Client but is protected from forced disclosure to third parties or seizure by third parties - typically only applies to legal advice from an attorney, solicitor or barrister and medical advice from a doctor. It does not extend to accountancy advice in most cases (unless given in the context of attorney client legal advice ).

b) Without Prejudice: This may not be put before a Court.

c) Without Prejudice save as to costs: This may not be put before a Court in relation to any matters of trial or fact (in other words, any questions to be raised in the heading must have been finished and the judge must have made a ruling; however when the judge comes to consider the costs of the hearing, the matters may be put before the Court (but only in relation to the costs assessment part of the hearing).

d) Confidential: This information is confidential and must not be disclosed to a third party. It is only applicable where there is an expectation of confidentiality from contract or practice, such as between client and bank or client and lawyer or client and doctor. where disclosed to a person where there is no practice of confidentiality (doctor, practicing lawyer or bank) then there needs to be a contract in place to protect confidentiality and it is the person who relies on the agreement of confidentiality who has to prove the existence of a confidentiality agreement.

e) Lobby Terms: Information received there is never attributed and events there are not reported.
Some Protection

f) Anonymous: This is usually used for information provided outside the realm of the legal sphere. It is purely a journalistic creation and has no backing in law. By convention, the information is able to be fully published and used although the person giving the information is not to be named. There must also be attribution that establishes the source's credibility and therefore it is necessary to use phrases such as "A Director of the Company said...." or a Senior Whitehouse Aid stated that......". Unless there is an express agreement that the source will not be revealed, any question by a judge to disclose the person's identity will need to be answered. (also known as "An unattributed briefing").

g) Unattributable: what is said can be reported but not attributed. (Differs from anonymous in that there is no disclosure of source at all).

h) Off the Record: This is usually used for information provided not for publication in a newspaper or journal. Journalists can state that information was provided by a named source off the record but cannot publish the information provided; however certain public interest factors may permit limited publication. It is provided for the use of the person concerned and can be fully disclosed internally and used in Court and attributed to the maker of the statement.

i) Anonymous Off the Record: This is usually used for information provided not for publication in a newspaper or journal. It is provided for the use of the person concerned and can be fully disclosed internally and used in Court but, without order of Court or request of a Judge, the name of the maker of the statement must not be attributed, although there must also be attribution that establishes the source's credibility and therefore it is necessary to use phrases such as "A Director of the Company said...." or a Senior Whitehouse Aid stated that......". Unless there is an express agreement that the source will not be revealed "in any event" , any question by a judge to disclose the person's identity will need to be answered.

j) Counsel to Counsel: This information may only be passed from legal counsel to legal counsel and may not be disclosed to clients. Usually used between barristers who are not even allowed to provide this information to their instructing solicitors. Counsel is however free to ask the right questions in Court or of its solicitors or clients thereafter providing that Counsel does not in any way disclose or hint at the information provided under Counsel to Counsel sources.

Almost no Protection

k) On the record: all that is said can be quoted and attribute

l) Chatham House Rules (i.e. the Royal Institute of International Affairs rules from 1927) which state that "When a meeting, or part thereof, is held under the Chatham House Rule, participants are free to use the information received, but neither the identity nor the affiliation of the speaker(s), nor that of any other participant, may be revealed"

m) On background: The thrust of the briefing may be reported (and the source characterized in general terms as above) but direct quotes may not be used.

n) Deep background: A US term with inconsistent meaning. Usually used to mean that the information may not be included in the article but is used by the journalist to enhance his or her view of the subject matter, or to act as a guide to other leads or sources. By convention, most deep background information is confirmed elsewhere before being reported.

Humourous

o) Double super secret background is a humorous phrase that refers to the journalistic concept of keeping a background source secret but has no real meaning. If used it means that information may not be included in an article not may it be summarized or used until confirmed from another source when that source must be blamed. It was coined by Time Magazine reporter Matthew Cooper in July 2005, during the controversy over the public disclosure of CIA operative Valerie Plame. The phrase originated in an e-mail of July 11, 2003, from Cooper to his Time bureau chief, referring to a conversation with Karl Rove. In compliance with a court order, the magazine released Cooper's notes, breaking Rove's anonymity.

What is legal privilege?

Before legal advice privilege can be claimed in respect of any communication three conditions must be satisfied:

1. the communication must pass between the lawyer and his client;
2. it must be confidential; and
3. it must be for the dominant purpose of obtaining or giving legal advice, that is, advice about the client's rights and obligations.

The solicitor's own assertion that the dominant purpose of a particular communication was the obtaining of legal advice is not conclusive and it is a matter for the court to determine on the basis of the whole of the evidence before it.

Legal professional privilege is concerned with the interaction between two aspects of the public interest in the administration of justice. The public interest in the efficient working of the legal system requires that people should be able to obtain professional legal advice on their rights and liabilities and obligations. This is desirable for the orderly conduct of everyday affairs. Similarly, people should be able to seek legal advice and assistance in connection with the proper conduct of court proceedings. To this end communications between clients and lawyers must be uninhibited.

But, in practice, candour cannot be expected if disclosure of the contents of communications between client and lawyer may be compelled, to a client's prejudice and contrary to his wishes. That is one aspect of the public interest. It takes the form of according to the client a right, or privilege as it is unhelpfully called, to withhold disclosure of the contents of client-lawyer communications.

In the ordinary course the client has an interest in asserting this right, in so far as disclosure would or might prejudice him. The other aspect of the public interest is that all relevant material should be available to courts when deciding cases. Courts should not have to reach decisions in ignorance of the contents of documents or other material which, if disclosed, might prejudice him.

CASELAW:

Are legitimate interests protected?

The legitimate interests of the confidant may, in appropriate cases, include disclosure to another party who has a legitimate interest in the matter.

For example, whilst a bank may not be able to make public certain matters under confidence, once it is alleged against the bank that it has facilitated activities which may bring it before the court as a third party or a defendant, then it is entitled to refer to facts and documents in its defence without breach of confidentiality (although it may not be able to disclose the same material to other parties).

For example, where a bank is threatened with being joined to a Court Case already before the Courts, the bank may be able to disclose its dealings to the Claimant without being sued by the Defendant (to whom it might otherwise hold a duty of confidentiality) because it may need to protect its reputation and its legitimate interests. It can only however do this as long as proceedings are in place before the Court be breached; however where the bank receives a letter before action stating that it will shortly be added as a Second Defendant in existing proceedings, it can pierce the veil of confidentiality to protect its legitimate interests and reputation, but must obtain an undertaking that the and may not be protected where there is a mere threat of action. (In other words where a mere threat to add the bank as second defendant in a future action arises, the veil of confidentiality may not be able to it is well established that a consultant can refer to patient confidential records and hospital confidential records where the hospital is being sued by a patient and reference is made to the action of the consultant as the Courts have recognised that grave injustice is done to the consultant if he were unable to defend his reputation by reference to patient confidential and hospital confidential records.

See Webster v James Chapman & Co.,

See Dunford & Elliott v Johnson & Firth Brown [1978]FSR 143 at 148

It is considered likely that where issues are pleaded so that the documents will become discoverable to parties in litigation, then the mere pleading of the matters that make the documents relevant destroys their confidentiality as against parties to that litigation even though the disclosure may actually occur a few weeks later. This is because once a party obtains a right to see the document, even if this is in the near future, the aura of confidentiality ceases to be applicable against those parties.

See also Coco v Clark 1969 FSR 415 which also further limited the reliance on confidentiality.

X A.G. v. A Bank [1983] 2 All ER 464 discussed the question of disclosure of documents in breach of the duty of confidentiality owed by a bank to its customers. Leggatt J. referred to the case of British Nylon Spinners Limited v. Imperial Chemical Industries Limited [1952] 2 All ER 780 and quoted the passage.
"The Courts of this Country will, in the natural course, pay great respect and attention to the Superior Court of the United States of America, but I conceive that it is nonetheless the proper province of English Courts, when their jurisdiction is invoked, not to refrain from exercising that jurisdiction if they think that it is their duty so to do for the protection of rights which are peculiarly subject to their protection. In so saying, I do not conceive that I am offending in any way against the principles of comity...."



We have advised our clients on

• the application of trade secrets,
• all aspects of confidential information.
  
• recovering sensitive company information,
• the methods and algorithms incorporated in computer software,
• loss of restricted and classified material
• protection of information which is a stock in trade that must remain confidential in order to compete.
• trade secret theft
• computer systems intrusion
• assessing and enforcing rights under non-disclosure agreements