General things to think about
- The definition of “confidential information”
- Sub-definitions: “Derived information” and “disclosed information”
- The confidentiality obligation itself
- To whom you can disclose confidential information: permitted disclosures to permitted disclosees
- The purpose for which the confidential information is needed.
- On the difference between confidential information and intellectual property
- Things a confi shouldn’t have: exclusivity, an indemnity and non-solicitation
- Then things go wrong: remedies for breach of confidence
- The inevitable reps and warranties — though in this more like what you are not saying
- When it’s all over: The return of information
- The term of a confidentiality obligation
Copyright and confidence
On the distinction between copyright and confidence
The key thing is to distinguish between breach of copyright and breach of confidence. The former is an intellectual property right over the form of information; the latter a contractual right over the substance of information.
- Breach of copyright: Copyright subsists in the particular articulation of the information, rather than in the information per se. To breach someone’s copyright is to deny a copyright owner the commercial benefit of its creation: e.g., by accessing for free something the copyright owner wants you to pay for. In other words I can’t copy Harry Potter and the Philosopher’s Stone without J.K. Rowling’s permission, but I can tell you the plot.
- Breach of confidence: Breach of confidence is less about the form of the information and more about its substance: If I have signed a confidentiality agreement I can copy confidential information to my heart’s content, as long as I only use it within the bounds of my licence to use it. In other words, I can do what I like as long as I don’t disclose the content of that information to anyone else. Here the forbidden action is “telling you the plot”: I could do that either by giving you a full copy of the material, or telling you the plot without copying anything at all. Breach of confidence thus creates heightened compliance issues, implying as it does that the confidential information is not public, presenting risks of market abuse and insider dealing.
- It is the substantive content and not the particular form of the information that is valuable.
Big difference here.
- Copyright — account for profits: If I breach your copyright must account to you for the profits I have made out of the misuse of your information.
- Confidence — damages: If I beach your confidence, I must compensate you for the damages you have suffered as a result. My profit from the use of the information is not part of the calculation (unless, by profiting from it, I have deprived you of the opportunity to profit, and even then you have to persuade a court that such a consequential loss was a reasonably foreseeable consequence of my breach, which courts have traditionally been reluctant to do.