Recently there has been an increasing realisation that protection of know how or confidential information is crucial. Whilst patents may protect an invention, they require that the process in question be disclosed to the world. Some take the view that it is better to keep such processes secret. Whilst the confidentiality of information is not protected by statute it can be protected by law.
What is confidential information?
The concept was described by Fennally J when delivering judgment on behalf of the Supreme Court in Mahon -v- Post Publications as follows:
‘The law with regard to confidential information is of comparatively modern origin. It was above all developed to regulate the behaviour of private parties and was based on the doctrine of trust. It is independent of contract. A recipient of a confidence must not breach it by communicating the confidential information to third parties. It is… capable of application both to purely personal and to non-commercial information’.
Fennally J. went onto review the Irish and English case-law, which enabled him to describe (at paragraph 74 of Mahon -v- Post Publications ) the ‘..contours of the equitable doctrine of confidence… ‘ as follows:
- The information must in fact be confidential or secret: it must, to quote Lord Greene, ‘have the necessary quality of confidence about it’;
- It must have been communicated by the possessor of the information in circumstances which impose an obligation of confidence or trust on the person receiving it;
- It must be wrongfully communicated by the person receiving it or by another person who is aware of the obligation of confidence.
As regards what is meant by ‘confidential’, at paragraph 72 of Mahon -v- Post Publications Fennally J quoted the judgment of Megarry J. in to the effect that:
‘..the information must be of a confidential nature…’something which is public property and public knowledge’, cannot per se provide any foundation for proceedings for breach of confidence. However confidential the circumstances of communication, there can be no breach of confidence in revealing to others something which is already common knowledge. But this must not be taken too far. Something that has been constructed solely from materials in the public domain may possess the necessary quality of confidentiality: for something new and confidential may have been brought into being by the application of the skill and ingenuity of the human brain. Novelty depends on the thing itself, and not upon the quality of its constituent parts’.
Recent Irish case-law on confidential information has tended to focus on a variety of issues including freedom of expression and employees. These issues are discussed below.
Confidential informaiton & Freedom of Expression
Several recent cases have considered the publication of confidential information in the media. This was the subject of Mahon -v- Post Publications. The plaintiffs were members of the Tribunal of Inquiry into Certain Planning Matters and Payments; the defendant was a publishers of a newspaper, the Sunday Business Post. The plaintiffs had sought an injunction restraining the defendant’…from publishing or using information or reproducing any document…in relation to which…the Tribunal has directed that such…documentation should remain confidential…’
However the plaintiff was unable to identify a legal basis upon which it was entitled to assert confidentiality. And so Fennally concluded (at paragraph 101):
‘The Tribunal seeks an order which will restrict freedom of expression. It claims that the press should be restrained from publishing information which it has designated as confidential. It has not been able to identify any legal power which it possesses to designate information released by it in that way. It seeks an order in very wide terms in respect of unspecified information, which would affect the entire media’.
The courts have to balance rights in confidential information with the Constitutional Fundamental and Human Right to freedom of expression. This means considering the ‘public interest defence’ which long predates those various Conventions. In National Irish Bank v. RTE one of the defendant’s journalists had written to the plaintiff asking it questions about bank accounts which the plaintiff alleged were being used to facilitate tax evasion. The plaintiff sought an injunction as ‘…publication of that information would damage the relationship of trust and confidence between the bank and its customers’ (paragraph 3 of the judgment). Both parties accepted that the information in question was confidential and that the defendant owed a duty of confidence to the plaintiff. The only issue before the Court was:
‘…whether the public interest in that confidential information remaining confidential outweighs the public interest …’
In National Irish Bank v. RTE Shanley J. held that it did not and refused the injunctions sought. His judgment was appealed to the Supreme Court, where Lynch J. held (at paragraphs 43-44):
‘There is no doubt but that there exists a duty and a right of confidentiality between banker and customer as also exists in many other relationships such as for example doctor and patient and lawyer and client. This duty of confidentiality extends to third parties into whose hands confidential information may come and such third parties can be injuncted to prohibit the disclosure of such confidential information . There is a public interest in the maintenance of such confidentiality for the benefit of society at large…On the other hand there is also a public interest in defeating wrong doing and where the publication of confidential information may be of assistance in defeating wrong doing then the public interest in such publication may outweigh the public interest in the maintenance of confidentiality’.
Both Lynch J. and Keane J. agreed that confidentiality did not prevent RTE disclosing information relating to alleged tax evasion to the Revenue Commissioners. The only issue upon which they differed was whether RTE could publish details of individual account holders.
The contract of employment implies that both employer and employee owe duties of trust and confidence to one another. This duty can be extended after the relationship ends. Such an extension was considered by Clarke J in Pulse Group Ltd v O’Reilly. The defendant was the plaintiff’s former CEO, who had left to set up a new business. The plaintiff argued (at paragraph 1.3) that he ‘…was in breach of his contract of employment and his fiduciary duty in relation to the manner in which th(is)..business…was established’. Clarke J. held (at paragraph 3.4) that:
‘In the absence of an express term in a contract of employment the only enduring obligation on the part of an employee after his employment has ceased is one which precludes the employee from disclosing a trade secret’.
Clarke returned to consider this issue in AIB -v- Diamond (2011) the background to which was ‘… the collapse of the Irish banking system in recent years’ (paragraph 1.1). The plaintiff sought to dispose of one of its businesses, the senior management of which sought to buy it. However, a better offer was made by a third party. The plaintiff then sought an injunction restraining certain employees of its business from using confidential information that had been sold to the third party. One of its grounds being that ‘…there is evidence of a significant download of customer information prior to the termination of the contracts of employment of the individual defendants’ (at paragraph 6.9). Clarke J. held (at paragraph 10.13) that:
‘…an employee is entitled to bring that employee’s general skill with him wherever he may go. It is only information that goes beyond general skill and knowledge which cannot be used against a former employer. So far as the names of clients of AIB … are concerned I am, on balance, satisfied that those names were either matters which relevant individual employees would have known themselves (given the intimate connection which, having regard to the nature of the business, employees had with the clients with whom they dealt) or was so easily ascertainable from publicly available materials that it could not be said to have any material confidentiality attaching to it. However, details of the commercial arrangements between those clients and AIB IFS were undoubtedly confidential. There is, in my view, therefore, at least an arguable case that some confidential information was retained and is likely to be used and that, in turn, the use of such information should be restrained’.
Clarke J. held (at paragraph 11.3):
‘…the primary confidence in respect of any such information is the confidence of the client or customer. If such a customer were to legitimately move its business to (the defendant)…then that customer would, of course, be entitled to have access to its own records as held on its behalf by AIB…No breach of confidence could arise, therefore, in respect of a client who moved their business from AIB…to (the defendant) for in those circumstances AIB…would have no legitimate continuing interest in the information concerned save to the extent of ensuring that the information should not be seen to have been disclosed improperly by AIB…personnel’.
In Net Affinity Ltd -v- Conaghan (2011) the plaintiff was ‘…a hotel marketing agency specialising in the provision of reservation and booking engine systems for independent and group hotels in Ireland’. The defendant was a former employee of the plaintiff, her contract of employment contained a confidentiality clause. She had left to join a rival leaving her former employer harbouring ‘…the most serious suspicions as to (her) conduct…in relation to the copying of documents and the retention by her of those documents on electronic devices…’ Dunne J. held that the defendant ‘…should not approach, solicit or deal with any existing customers of Net Affinity. It seems to me that the relevant period of time in this regard should be a period of twelve months’. Dunne J. concluded by noting:
‘There may be cases in which it is appropriate to impose a restriction to prevent a breach of confidentiality on an employee taking up employment elsewhere such that the employee cannot work for a competitor for a period of time but it does seem to me that if a court is asked to consider such a restriction that, just as in the case of considering what is appropriate in the context of a restraint of trade clause, the court should impose a restriction which is no more than is reasonably necessary in order to protect the employer’s legitimate interest’.
Recently there has been an increasing realisation that protection of know how or confidential information is crucial. Whilst patents may protect an invention, they require that the process in question be disclosed to the world. Some take the view that it is better to keep such processes secret. The law relating to confidential information may enable some to do just that.