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At Crate Jacobs we have many years of experience in helping our clients protect and enforce their confidential information. This blog sets out a few practical tips for protecting and enforcing confidential information.
What is confidential information?
Confidential information is information that is not public knowledge and has a “necessary quality of confidence”. This means it is not readily accessible or widely known. Examples of confidential information include trade secrets, customer lists, business strategies, inventions and technical know-how.
In practical terms, the confidential information must also be disclosed in circumstances that impose an obligation of confidence. Such an obligation can be made either:
- explicitly through contracts (i.e. via Collaboration Agreements, R&D Agreements, a Non-Disclosure Agreement (“NDA”) or a Contract of Employment which include express confidentiality obligations); or
- implicitly through the nature of the relationship or the circumstances of disclosure (for example communications between a client and their lawyer, a patient and their doctor or during pre-contractual pitches and joint-venture talks).
Breach of confidence
A breach of confidence occurs where there is an unauthorised use of the information that causes harm or detriment.
Why protect confidential information?
The importance of protecting confidential information lies in its value as a business asset. Its misuse can lead to significant economic loss, reputational damage, and legal consequences.
For example, designers who disclose their new non publicly disclosed designs to a third party without an NDA in place will likely start the clock ticking on the 12-month grace period for filing design applications (as set out in this blog we wrote). We have acted for various clients where these disclosures have prevented them from being able to successfully enforce their design rights.
It is also critical for inventors looking to obtain patent protection for their inventions to put in place NDAs before disclosing details of their inventions with third parties. If you fail to do this before any patent application is filed, it is likely the disclosure will destroy the novelty of your invention.
What remedies are available if your confidential information has been breached?
It is not uncommon for competitors to try and obtain confidential information and use it to their commercial advantage.
The goods news is that if a party uses your confidential information without consent a court can:-
- grant injunctions to prevent further misuse;
- order the return or destruction of the information; and
- award damages or an account of profits for any losses incurred.
In practice as part of ADR, parties often negotiate commercial “without prejudice” settlements to avoid costly and time-consuming court trial. This will often involve the defendant signing various legal undertakings to satisfy the claimant’s concerns.
Injunctions (preventative relief)
Injunctions are tools used by claimants to prevent the harm (actual or anticipated) from occurring.
Injunctions take the following main forms:-
- Interim injunction: An urgent court order used to stop a threatened or ongoing breach before the full trial takes place. This is commonly used where the confidential information has not yet been fully exposed.
- Springboard injunction: This is a temporary court order that stops a competitor (usually a departing employee or team) from using an unfair “head start” gained through unlawful acts like a breach of confidence.
- Permanent injunction: A permanent or time-limited court order granted after a full trial to prevent any further use or disclosure of the confidential information.
Practical steps to protect confidential information
To protect confidential information, businesses can take several practical steps, these include:-
- drafting clear confidentiality clauses in contracts such as Contracts of Employment and NDAs (it is best practice to have express written agreements instead of having to rely on an implied duty of confidence);
- implementing robust data security measures like encryption and access controls; and
- educating employees on the importance of confidentiality.
Businesses should also limit disclosure to a “need-to-know” basis, use view-only access for sensitive documents, and redact unnecessary details when sharing information.
How Crate Jacobs can help
We have many years of experience in helping individuals and businesses bring and defend breach of confidence claims.
You can mitigate the risk of the breach causing your business harm by obtaining legal advice at your earliest opportunity. Likewise, if you have received a Letter of Claim alleging breach of confidentiality it is prudent to obtain legal advice without delay.
If you have a confidentially issue you need assistance with, please feel free to contact us (info@cratejacobs.com, 01737 339 618).
We pride ourselves on getting to know our clients and their long-term commercial objectives so we can provide tailored, pragmatic and cost-effective legal advice.
Daniel Crate
Intellectual Property Solicitor
Founding Partner of Crate Jacobs