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Confidential information, trade secrets and knowhow

A trade secret, confidentil information or "knowhow" may be protected by a contract e,g, a confidentiality or non-disclosure agreement (NDA).For example, an inventor who has designed a new device, or an author or artist who has created a method of manufacture or a TV programme should require any recipient of the information to sign an NDA prior to disclosing it.

In the absence of an NDA or other contract, English law will to an extent protect information which a provider has given in confidence expressly or by implication. This protection was developed by the English courts as part of the "equity"  jurisdiction which focuses on a person's conscience as distinct from the common law jurisdiction protecting strict legal rights and remedies. In view of the uncertainties of relying upon the law of confidence, it will generally be preferable to protect information by means of a contract.

Protection by contract or the law of confidence has limitations. If a third party acquires the information by lawful means, or the information enters the public domain otherwise than by breach of contract or confidence by the recipient, the contract or confidentiality may no longer protect the information. This contrasts with the proprietary protection afforded by formal intellectual property rights including patents, registered design and trade marks, and to a lesser extent by unregistered intellectual property rights such as copyright and unregistered design rights. which are good against the whole world.

 

What's New [see What's New page or archive for full item]:

19/02/2018: IPO consults on UK implementation of the EU Trade Secrets Directive

Source: Intellectual Property Office


Measures and remedies for the misappropriation of trade secrets vary across EU
Member States. Few EU Member States include a definition of a trade secret in their
legislation. In the absence of a common definition, a study carried out for the
European Commission suggested this could lead to inconsistency, making
enforcement in other EU Member States more difficult.

The Trade Secrets Directive seeks to address the uneven protection of trade
secrets in EU Member States by bringing legal clarity and a level playing field to all
European companies. The Directive provides minimum standards for measures, procedures and remedies that trade secret holders should be able to rely on in the event of unlawful acquisition, use or disclosure of their trade secrets. It also harmonises the definition of trade secrets in accordance with existing international standards.

The full text of the Directive is included at:  

http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32016L0943&from=EN


The UK has a robust and well established legal framework that allows for the effective
enforcement of trade secrets. Trade secrets are governed in the most part by the
common law (case law) of breach of confidence and by contract. There is no statutory definition of what constitutes a trade secret in UK law. However, case law has ensured principles of law have been developed that apply in this area.


As the UK already has a well-developed system of legal protection for trade secrets,
the EU Directive does not require substantial changes to be made to UK law. It is our
view that the majority of the Directive’s substantive provisions already exist in UK law,
either in common law, statute or by means of court rules (for example, the Civil
Procedure Rules (CPR), which govern civil proceedings in the High Court and county
courts in England and Wales).

There are owever certain changes that the IPO believe need to be made to
ensure that the UK, in each of its jurisdictions, complies with the Directive in a
transparent manner. In the main these concern limitation or prescriptive periods,
procedural issues for the courts when hearing cases on breach of confidence in
relation to trade secrets, and certain remedies.

 

12/03/2014: Musicians lose breach of confidence suit v British Sky Broadcasting Ltd
http://www.bailii.org/ew/cases/EWHC/Ch/2014/634.html
Wade and another v British Sky Broadcasting Ltd
[2014] EWHC 634 (Ch)  Hearing Date: 11 March 2014
The claimant musicians pitched to Sky a music talent show called “the Real Deal” but they did not commission the show. However, Sky did later commission and broadcast another musical talent show called “Must be the Music”. The claimants issued proceedings against the defendant for misuse of their confidential information.
The High Court Chancery Division judge dismissed the claim and ruled that Must be the Music had been created entirely independently. The various tell-tale indications relied on to show a link, individually and as a whole, did not amount to strong evidence to support the inference that aspects of Must be the Music had been derived from the Real Deal.
Comment: the claimants’ case relied solely on the law of confidence. It is possible that they may have had a stronger case had they pitched under a confidentiality or non-disclosure agreement (NDA), although it must be said that the judge found that Must Be The Music was created entirely independently of The Real Deal.  In those circumstances, it would be unlikely that the musicians would have succeeded even Sky were to have signed an NDA.

03/02/2014: Confidentiality agreement upheld by injunction
http://www.bailii.org/ew/cases/EWCA/Civ/2014/29.html
Personnel Hygiene Services Ltd and others v Rentokil and others
[2014] EWCA Civ 29  Hearing Date: 29 January 2014

In this case, the Court of Appeal upheld an injunction enforcing a confidentiality agreement, even though the claimant had entered into a subcontract with the defendants after the confidentiality agreement. The Court rejected the defendants’ argument that damages were an adequate remedy.

29/11/2013: EU Commission proposes rules to help protect confidential business information
http://europa.eu/rapid/press-release_IP-13-1176_en.htm
The EU Commission has proposed a Directive to harmonise the laws of EU member states on the protection of trade secrets or confidential business information. Unlike recognised intellectual property rights such as patents and copyright, the holder of a trade secret, such as a formula, business process, recipe or marketing concept, is not the owner of an exclusive right over its creation. Competitors, and other third parties, may therefore discover, develop and freely use the same formula.

16/11/2012: Inventor of Reggae Reggae sauce resists appeal
Bailey and another v Graham and others [2012] EWCA Civ 1469
In June 2006 Levi Roots started preparations for the launch of a jerk sauce entitled Reggae Reggae Sauce at the Notting Hill Carnival in August that year. In that month he applied to Sainsbury's for financial and other support. Later in the year he applied, successfully, to go on the TV programme "Dragons' Den" on which he obtained financial support of £50,000. A Mr Bailey claimed to have invented the recipe and disclosed it in confidence to Levi Roots. The Court of Appeal has dismissed Mr Bailey’s appeal from the decision of the High Court.

[Page created: 20/02/2018

 

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