Confidential Information


Confidential Information – Loose Lips Sink Ships

Unlike copyright, registered designs, trademarks and patents which are creatures of statute. Confidential Information is not a creature of statute.

Loose Lips Sink Ships. Keep your confidential information secret. If you don't it may sink your business.

Confidential information is a creature of the common law. Contractual to some degree and equity in other aspects. Trade secrets are only secrets if they are proprietary that is it must have some value to you. You must keep it confidential. You must have a method to prove how you keep the confidential information secret. not everyone within your organisation has all aspects to it. When you impart trade secrets to someone you must make sure they know they are receiving a trade secret that is

  • proprietary,
  • confidential,
  • secret information

and that it was not misused.

Because trade secrets are not a creature statute there are no registrations provisions. The duration of protection is forever.

Classic Coca-cola Bottle

Keep Your Secrets Secret

For instance, with Coca-Cola, there’s a secret formula, that they have never disclosed to the public. Albeit, someone with a mass spectrometer might be able to find out what’s in it. But, that fact doesn’t take away the fact that Coca Cola kept its secret. Unless disclosed by them that secret will remain with them.

The form to transfer confidential information is again by contract. There isn’t any registration or any legislation. To pass a trade secret between one person and another use a contract. There are no international protections for trade secrets. Each country deals with confidential information itself

There are several steps that you can take to protect confidential information

  • Entering into non-disclosure agreements (NDA),
  • keeping adequate records of what information you create is confidential.
  • Making sure that only those employees that need to know have that information.

Who Knows Your Business Secrets?

Some years ago we acted for a Sydney hairdresser. He ran shops in several suburbs. They kept their confidential records of their clients’ details in paper form. It was a little bit before computers. One of their key employees left. There was no competition or restraint of competition clause. That key employee went across the road. Took out an empty shop and started to compete against their head office. The client that we were acting for started receiving telephone calls saying

  • ‘why are you contacting me?’,
  • ‘have you moved?’
  • ‘what’s this new location?’

They were able to discover that it was the ex-employee who was contacting them. The ex-employee had taken away the clients information. The difficulty that my client had was that everyone from the

  • receptionist,
  • the newest apprentice and
  • himself

had access to information about clients. It was very difficult for them to establish they protected their clients’ details. They were not able to succeed in any breach of confidential information. Even though the employee had stolen that information from them.

You need to be able to show a court your information is so important that you took appropriate steps to protect it. It is very difficult for a court to help you if you haven’t protected your information. Trying to protect information after disclosure is futile.

In a large organisation, issue regular reminders to your employees. Remind them of their obligations to keep information confidential.

Steven Brown Talks About – Confidential Information

Find out how much you know about Confidential Information and Intellectual Property by taking the Intellectual Property Quiz
Smart Thinking Parramatta – learn about Confidential Information and Trade Secrets from Steven Brown.