My article in July's issue of WBN talked about the
legal test to establish a breach of confidence. In this follow-up
article, I outline what remedies are available to a person who
finds their secret is out.
To refresh readers' memories, in order to establish breach
of confidence a person must prove:
The subject information has the necessary quality of confidence
The subject information has been communicated in circumstances
importing a duty of confidence; and
There has been an unauthorised use of that information to the
detriment of the person communicating it.
The first requirement refers to information that is not public
knowledge, i.e. 'private' knowledge. Such knowledge
typically includes trade secret (such as recipes or formulae), a
database of information or designs for a new product.
The second requirement refers to the manner in which the
'private' information has been passed from person A to
person B. The obligation frequently arises out of a relationship
between two parties in which one party has passed 'private'
information to the other party on the basis it is to be used only
for a known, agreed and usually limited purpose.
The third requirement is that the recipient of the confidential
information has disclosed or used that information without the
consent and to the detriment of the owner1 of that
If a person can establish all these elements the court will
In any case for breach of confidence the complainant can choose
what remedy or remedies they want; what remedies they get however
will be decided by the judge. The choices are usually one or more
of the following:
damages (monetary compensation), which usually requires expert
evidence as to the amount of loss and how that amount has been
account of profits, to claw back any riches the person in
breach has unjustly made;
injunction, to stop a person from continuing to do something
and/or prevent them from doing something in the future; and
exemplary damages, if the breach is so flagrant that an
additional level of punishment is required.
The most appropriate remedy or remedies is really dependent on
the circumstances of each case. For example, if you know an
ex-employee has taken a copy of a customer database and is about to
set up a rival business, then an injunction to prevent use and to
order destruction or return of that copy would probably the most
appropriate as the owner of the information is unlikely to have
suffered any loss at this point to justify a claim for damages or
account of profits.
Taking the same scenario a step further, if the ex-employee has
already set up the business and stolen customers directly because
of access to the customers' details then it would be
appropriate to seek an injunction plus either damages or an account
of profits (depending on, for example, how long the unlawful use
has been going on and/or the value of the business lost).
If you think your secret may be out, or is out and you want to
do something about it, feel free to give me a call (in confidence,
of course!) to discuss how we can help.
1A legal term to describe a person entitled to
make an application for a patent. In New Zealand
this includes any person claiming to be the true and first
inventor, the assignee of the inventor, or the
legal representative of a deceased inventor or his/her
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
James & Wells Intellectual Property, three time winner
of the New Zealand Intellectual Property Laws Award and first IP
firm in the world to achieve CEMARS® certification.
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