Therese Catanzariti

Confidential Information

LPAB Winter SessionTherese Catanzariti

Therese Catanzariti

Copyright – expression of ideas Patent – ideas in a particular technical context

confidential information – ideas

Commercial - know-how, trade secrets, concepts, systems, processes, techniques, plans

Personal – Argyll v Argyll Govt – Commonwealth v John Fairfax

protection of ideas

Therese Catanzariti

Moorgate Tobacco Co Ltd v Philip Morris Ltd (No 2) (1984) 156 CLR 414 at 438 (Deane J)

its rational basis does not lie in proprietary right. It lies in the notion of an obligation of conscience arising from the circumstances in or through which the information was communicated or obtained”

Information is not property

Therese Catanzariti

Farah Constructions v Say Dee (2007) 230 CLR 89Information that Council’s would likely approve DA if property

amalgamated with adjoining properties

[118] Even if the information were confidential, that would not make it property for the purposes of the first limb of Barnes v Addy. The protection given by equitable doctrines and remedies causes confidential information sometimes to be described as having a proprietary character, "not because property is the basis upon which that protection is given, but because of the effect of that protection”. Certain types of confidential information share characteristics with standard instances of property. Thus trade secrets may be transferred, held in trust and charged. However, the information involved in this case is not a trade secret.

Information is not property

Therese Catanzariti

Contract◦ define Confidential Information may protect information that equity not protect◦ only use for Authorised PurposeMay be narrower than what equity allow

Equity◦ restrain use of confidential information ◦ unconscionable to use for other purposes◦ equitable remedies – injunction, account of profitsmay be better than damages

jurisdictional basis

Therese Catanzariti

Optus v Telstra [2010] FCAFC 21 network interconnection permits carriage of

telecommunications traffic generated by customers of one party on the other party’s network

=>Telstra access to Optus traffic information - quantity, source, destination, duration, time of occurrence and kind of the telecommunications traffic, as well as the value of the telecommunications traffic whether in terms of its aggregate billing value or individual customer billing details and value

equitable and contractual obligations co-exist - exhaustive definition of Confidential Information in Access Agreement does not show that intend exclude equitable obligation

Optus entitled to equitable remedies

contract and equity co-exist

Therese Catanzariti

Prince Albert v Strange (1849) 47 ER 1302 Restrain publication of private etchings of

Royal Family

Douglas v Hello Ltd [2007] UKHL 21 restrain publication of photos of Michael

Douglas and Katherine Zeta Jones wedding Naomi Campbell v Mirror Group Newspapers

Ltd [2004] UKHL 22

may operate to protect privacy

Therese Catanzariti

Coco v A.N. Clark (Engineers) Ltd [1969] RPC 41 at 47 per Megarry J

Coco disclose information about moped – AN Clark abandon discussions with Coco and develop own moped

information itself must ‘have the necessary quality of confidence about it.’

information must have been imparted in circumstances importing an obligation of confidence

unauthorised use of that information to the detriment of the party communicating it.

elements

Therese Catanzariti

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic)

the information in question must be identified with specificity;**

it must have the necessary quality of confidence;

it must have been received in circumstances importing an obligation of confidence, and

must be an actual or threatened misuse of the information without consent

elements - Australia

Therese Catanzariti

Corrs Pavey Whiting & Byrne v Collector of Customs (Vic)

Solicitors acting for patentee of Naproxen requested Customs provide documents relating to Alphapharm importing infringing drug

Documents not disclosed bc confidential

Gummow dissent reviews law of confidence

Therese Catanzariti

Smith Kline & French Laboratories (Australia) Ltd v Secretary, Department of Community Services & Health

SKF submitted information with govt to get marketing approval for drug

govt disclosed information to maker of generic drug

plaintiff must be able to identify with specificity, and not merely in global terms

information identified with specificity

Therese Catanzariti

Del Casale v Artedomus (Aust) Pty Ltd - “Isernia” is modica stone sourced from Ragusa in Sicily

Wright v Gasweld – only 4 of 3000 Taiwanese suppliers are reliable

1.The extent to which the information is known outside the business.2. The extent to which the trade secret was known by employees and others involved in the

plaintiff’s business.3. The extent of measures taken to guard the secrecy of the information.4. The value of the information to the plaintiffs and their competitors.5. The amount of effort or money expended by the plaintiffs in developing the information.6. The ease or difficulty with which the information could be properly acquired or duplicated

by others.7. Whether it was plainly made known to the employee that the material was by the

employer as confidential.8. The fact that the usages and practices of the industry support the assertions of

confidentiality.9. The fact that the employee has been permitted to share the information only by reason of

his or her seniority or high responsibility.10. That the owner believes these things to be true and that belief is reasonable.11. The greater the extent to which the “confidential” material is habitually handled by an

employee, the greater the obligation of the confidentiality imposed.12. That the information can be readily identified.

necessary quality of confidence

Therese Catanzariti

Moorgate Tobacco Co Ltd v Philip Morris Ltd marketing results, advertising, position paper and

knowledge that Loew’s wanted to introduce the brand “Golden Light” into Australia

evidence did not establish that any of the material was in fact regarded as confidential by Loew's or that Loew's at any time requested Philip Morris to treat or regard it as confidential

ABC v Lenah Game Meats Possum slaughtering process not confidential

necessary quality of confidence

Therese Catanzariti

Terrapin Ltd v Builders' Supply Co (Hayes) Ltd [1967] RPC 375 at 391-2, Roxburgh J stated that:

A person who has obtained information in confidence is not allowed to use it as a spring-board for activities detrimental to the person who made the confidential communication, and spring-board it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public. ... It is, in my view inherent in the principle upon which the Saltman case rests that the possession of such information must be placed under a special disability in the field of competition in order to ensure that he does not get an unfair start.

May be protected even if it later becomes public – springboard doctrine

Therese Catanzariti

Coco v AN Clark – reasonable person A reasonable person standing in the shoes

of recipient of information would have realised information disclosed for a limited purpose

received in circumstances to import obligation of confidence

Therese Catanzariti

Smith Kline & French v Sec Health SKF submitted chemistry, quality control and clinical trial

information relating to cimetidine compound for treatment of peptic ulcers marketed as “tagamet”

Sec Health plan to use SKF to assess Alphapharm application for generic drug

Sec Health neither know nor ought to have known of SKF limited purpose –SKF did not direct attention to what else might be done subsequently with the information when it furnished the data

Court not impute placing or acceptance of obligations which restrict Sec discharge of functions under Regulations

received in circumstances to import obligation of confidence

Therese Catanzariti

TF Industrial Pty Ltd v Career Tech Pty Ltd [2011] NSWSC 1303

recruitment database of client and candidate files

parties merged the two databases without discussing who owned

over time, both parties used for own purposes and incrementally added to database

no attempt to keep data separate both parties had master password

Information could be freely used by defendants not imparted to them in circumstances importing an

obligation of confidence.

received in circumstances to import obligation of confidence

Therese Catanzariti

Ashburton v Pape [1913] 2 Ch 469

Ashburton’s solicitor received information from Ashburton in confidence

Solicitor breached obligation to Ashburton by giving information to Pape

Pape owed obligation to Ashburton even though no direct relationship between Pape and Ashburton

restrain the publication of confidential information improperly or surreptitiously obtained

received in circumstances - no direct relationship

Therese Catanzariti

Wheatley v Bell Coummunications idea to find new customers

through indexing system W disclose to B in Perth, B set up business in

Sydney B breached obligation to W and disclose to

2D and 3D who paid for information 2D and 3D knew or ought to have been aware

of confidence, so also bound by obligation of confidence, even though paid money

received in circumstances - no direct relationship

Therese Catanzariti

SKF v Sec Health Disputants not private parties and one is

Commonwealth officer who acts in discharge of responsibilities placed on him by regulations

Used for unauthorised purpose

Therese Catanzariti

Gartside v Outram (1856) 26 LJ Ch 113Ex-employee disclose wool brokers business records

that disclosed that brokers defrauded their customers

No confidence in an iniquity, can’t make me the confidant of a crime or a fraud

contrast Corrs Pavey v Collector CustomsNo public interest defenceInformation no necessary quality of confidence

because Alphapharm committing civil wrong

defence - iniquity

Therese Catanzariti

Commonwealth v John Fairfax Govt defence papers incl East Timor, Iran Shah, Soviet navy in Indian sea, ANZUS treaty

equitable principle has been fashioned to protect the personal, private and proprietary interests of the citizen, not to protect the very different interests of the executive government. It acts, or is supposed to act, not according to standards of private interest, but in the public interest. This is not to say that equity will not protect information in the hands of the government, but it is to say that when equity protects government information it will look at the matter through different spectacles.

It may be a sufficient detriment to the citizen that disclosure of information relating to his affairs will expose his actions to public discussion and criticism. But it can scarcely be a relevant detriment to the government that publication of material concerning its actions will merely expose it to public discussion and criticism. It is unacceptable in our democratic society that there should be a restraint on the publication of information relating to government when the only vice of that information is that it enables the public to discuss, review and criticize government action.

court will determine the government's claim to confidentiality by reference to the public interest. Unless disclosure is likely to injure the public interest, it will not be protected.

defence – public interest - govt

Therese Catanzariti

Lion Laboratories Ltd v Evans Intoximeter measure driver’s level of intoxication

used in criminal prosecutions Ex-employees disclosed Lion confidential

documents that device unreliable Exceptional circumstances to disclose risk that

people convicted for crime didn’t commit

Hubbard v Vosper [1972] 2 QB 84 Book critical of Scientology these courses contain such dangerous material that it is

in the public interest that it should be made known.  

Defence – public interest

Therese Catanzariti

Co-exist with equitable duty – Optus v Telstra

express Implied

◦ necessary and reasonable for effective operation of agreement – Byrne v Australian Airlines, Codelfa v State Rail

◦ class of contract (eg employment)

contract

Therese Catanzariti

Maggbury v Hafele parallel-opening foldaway ironing board M and H sign confidentiality deed, and M

disclose idea to H Information become public through patent

doctrine of restraint of trade applied to contractual restraints once information public

subject to restraint of trade

Therese Catanzariti

Del Casale v Artedomus – source of isernia and fact modica

contract of employment generally includes an implied term imposing a duty of good faith on the employee, and that this turn carries with it an obligation on the employee not to divulge confidential information or to use it in a way that could be detrimental to the employer

content of duty will vary according to the position of the employee: generally, more senior employees, having access to more confidential information, will be subject to greater restraint than more junior employees.

employment– during employment

Therese Catanzariti

Faccenda Chicken v Fowler – delivery routes Two types of information

◦ secret processes of manufacture such as chemical formulae or designs or special methods of construction and other information which is of a sufficiently high degree of confidentiality as to amount to a trade secret

◦ Confidential information given to or acquired by the employee while in his employmentbecomes part of the employee’s know-how which the employee should be able to use after employment ceasescan’t prevent competition by preventing ex-employees using their know-how

employment – after employment

Therese Catanzariti

There is a category of information that an employee must treat as confidential but which, once learned, necessarily remains in the head of the employee and becomes part of his own skill and knowledge. While that information may have been acquired in the course of the employer’s business, the employee will be allowed to use his full skill and knowledge for his own benefit, even in competition with his former employer after he leaves that employment. Such information is often referred to as "know how", being the skill and knowledge that an employee gains during the course of his employment, which is not capable of protection in favour of the employer.

Bluescope Steel v Kelly

Therese Catanzariti

Printers and Finishers Ltd v Holloway numerous practical details of a technical process

called flock printing.

Del Casale v Artedomus Source of isernia and fact it is modica stone Information can’t realistically be separated out from

the general know-how in relation to the stone

contrast Bluescope Steel v Kelly R&D project – strip casting technology for steel

Part of employee’s know-how