In Confidence: When to Protect Secrecy and When to Require Disclosure

The variety and pervasiveness of confidentiality issues today is breathtaking. In Confidence: When to Protect Secrecy and When to Require Disclosure.
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In some cases the obligation to keep information confidential may also arise even though no direct relationship arises, as long as the recipient is aware or ought to be aware in the circumstances of the confidential nature of the information. Of course, a person claiming that confidence has been breached will face more of an uphill challenge when there is neither a direct relationship nor a contract to point to, to demonstrate why the recipient ought to have known that the information was confidential.

Since the source of protection is equity, equitable remedies are available, which include injunctions preventing the use or disclosure of trade secrets. This might apply, for example, after a product which is capable of being reverse engineered reaches the market, if the infringing party had been developing the product while the technical information remained confidential. However, the nature of equitable remedies carries some drawbacks. Undue delay can also be a bar to obtaining equitable relief.

Protecting trade secrets under English law

In the outrage of learning that a trade secret has been copied, businesses may be tempted to place unrealistically high values on their claims. As with any intellectual property action, the assessment of damages is fraught, but follows certain principles. Unless the information formed part of a package which was subject to an established licence fee in which case the calculation of damages will be more straightforward , the court will look at a range of issues and factors to come to an assessment.

In some EU Member States, the misuse or disclosure of trade secrets can attract penal criminal or civil measures, and the draft Directive includes provision for Member States to penalise any person who abusively brings a manifestly unfounded claim for infringement of trade secrets.

The draft Directive specifically mentions damages to the accused, imposing sanctions on the applicant or ordering the dissemination of the information concerning the decision taken. As the law currently stands, English courts have a wide discretion in the form of order which they can make and the manner of publication of their decisions.

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Likewise, the court can impose costs sanctions in respect of an abusive claim. However, the award of damages to the accused is not currently a remedy available under English law. Existing English law already affords a level of protection for most kinds of information, potentially covering a wide range of circumstances of disclosure.

In terms of substance, the implementation of the Directive into national law may not make any immediate difference until the CJEU starts handing down decisions clarifying precisely how protection is meant to be understood. However, the Directive may still lead to a change in one respect; the protection of trade secrets is likely to be given a statutory basis in English law for the first time.

This should bring greater certainty to the law on misuse of trade secrets and, for that reason, may help improve compliance, in that it will be clearer to anyone tempted to misappropriate data why what they are contemplating is prohibited. Register now for more insights, news and events from across Osborne Clarke. The European connected consumer: Digital business Energy and utilities Financial services Life sciences and healthcare Real estate and infrastructure Recruitment Retail and consumer Transport and automotive.


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Protecting trade secrets under English law | Osborne Clarke

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