Every business will create or hold information that is private and/or commercially sensitive. It is important to take steps to protect the confidentiality of that information to avoid it becoming public knowledge or ending up in the hands of a competitor. Collyer Bristow can advise on practical steps to protect confidentiality, as well as legal remedies if you discover or suspect that such information has been or may be misused.

How does the law protect confidential information?

Information can be protected as ‘confidential’ in England and Wales, provided it has a ‘quality of confidence’ (i.e. is not known publicly) andit was imparted in circumstances where the recipient should have realised that the information was intended to be kept secret. Almost every business will have confidential information. Examples include employee records, details of new business concepts and strategic initiatives, customer lists and financial information.

If confidential information is used or disclosed without the owner’s consent in a way that is detrimental to the owner, for example, to help a competitor undercut prices, then legal remedies are available. If the information has not yetr been disclosed publicly, then an injunction may be granted to prevent further use or publication. If the information has been used and/or disclosed, then then unauthorised user may be ordered to pay damages or other compensation.

What are trade secrets?

A trade secret is a specialist type of commercially valuable information which is secret and has been subject to reasonable steps to keep it secret. For example, a non-disclosure agreement has been negotiated to ensure that confidentiality is maintained.

There is significant overlap between the test for what amounts to confidential information and the test for a trade secret. However, a major difference is there is no need to show that the trade secrets have been used or disclosed in order for the owner to protect them. Under The Trade Secrets (Enforcement, etc.) Regulations 2018, claims may be brought for ‘prying eyes’ alone, which is beneficial when you can’t prove that anything has been done with the trade secrets.

What is the protection of know-how?

Know-how can take many forms and includes technical or business expertise that relates to the way something is done, such as a methodology or a production process. It usually results from research or working experience and is not always written down, which can make it difficult to define. However, if all or part of it is not publicly available, then it may be protected as confidential information.

A big issue with know-how is that it often travels with an employee. Contractual restraints are often the best way to stop valuable know-how from leaving the building. Collyer Bristow can help to ensure that employment contracts contain appropriate restrictions on what a departing employee can take with them.

Protecting confidential information with NDAs

Non-disclosure agreements (NDAs) have recently been criticised for their role in preventing individuals who have agreed terms of settlement in a dispute from being able to talk about the dispute subsequently. However they are both legitimate and valuable tools in a commercial context for explicitly defining confidential information, trade secrets and know-how and providing contractual remedies for breach of confidentiality. It’s generally easier to enforce a contractual obligation than a claim under the common law or Trade Secrets Regulation, so NDAs are often the first line of defence in protecting confidential information.

Care is needed when negotiating and drafting an NDA to ensure that it will be enforceable. The key issues include: is the information truly confidential? Does it belong to you? Has the information been shared with anyone before? Is the NDA overreaching or too restrictive? Is it anti-competitive? Does it apply unilaterally or bi/multi-laterally?

How we can help you

Our specialist confidential information lawyers can guide you through these complex questions. We can help you:
• Protect your confidential information, know-how and trade secrets, both internally and when dealing with third parties
• Commercialise your valuable confidential information
• Implement firm-wide policies in relation to confidential information protection
• Create legally enforceable NDAs
• Enforce your rights against breaches, through the courts if necessary
• Advise on and pursue the most appropriate remedies for breaches of confidentiality, including injunctions and damages to rectify economic loss

Our team has years of experience in complex misuse of confidential information cases. We can help you keep ahead of the competition and ensure that your valuable confidential information remains safe and protected against misuse.