To claim for breach of confidence in the UK, there are three key requirements: (i) the information itself must have the necessary “quality of confidence”; (ii) the information must have been imparted in circumstances importing an obligation of confidence; and (iii) there must be an unauthorised use of that information.
This article explores the boundaries of “quality of confidence” and how this has particular relevance for businesses operating in the life sciences sector where, in an ever-evolving and highly competitive industry, protecting confidential information is paramount.
When will information have the necessary “quality of confidence”?
This will of course be fact specific and simply describing or labelling a document as “confidential” will not in itself determine whether the information in question is inherently confidential and capable of protection.
In many cases, it will be clear that the information has the necessary quality of confidence by its very nature. For companies in the life sciences industry, this is likely to capture categories of information such as secret chemical formulas, proprietary manufacturing processes and related documentation (e.g. manuals and technical drawings), algorithms, data and results from confidential research, biological sequence information and technical data to support regulatory filings (e.g. cell line history).
However, disputes often arise where the information relied on can potentially be ascertained from existing material in the public domain, or is constructed solely from publicly available information. In these circumstances, to merit protection under the laws of confidentiality, something new and confidential must have been created by the application of skill and ingenuity. Whilst this would not cover very basic collections of non-confidential items, certain compilations of commercially valuable data such as customer lists may nevertheless attract protection.
Another challenge arises where the confidential information relied upon (for example, a manufacturing process or recipe) is ascertainable by reverse engineering. However, the English courts have recognised that such information may still have the requisite quality of confidence where the reverse engineering would involve a significant amount of work (or "special labours”) and injunctions may be granted to compensate for the time saved by misusing such confidential information.
What practical steps can help to maintain confidentiality?
To ensure that proprietary information continues to attract the necessary quality of confidence, there are practical steps that can be taken. For example:
- Restricting internal access to confidential information on a strict need-to-know basis and maintaining a record of individuals who have been granted access.
- Physical and electronic security, such as firewalls, secure e-mails, encryption and password-protecting documents.
- Training employees with access to particularly sensitive information, to ensure valuable trade secrets are not inadvertently made public through presentations, trade shows or customer meetings.
- Ensuring that contractual agreements with third parties include appropriate restrictions on use/disclosure and oblige the recipient to return or destroy confidential materials.
- Keeping written development records for key projects to demonstrate the origin of valuable information and trade secrets.
Our multi-disciplinary life sciences team regularly advise on issues concerning the protection, exploitation and misappropriation of confidential information. We would be delighted to assist with any queries relating to the issues raised in this article.