Key Takeaways

  • Breach of confidence protects trade secrets, private data, and commercially valuable information when shared under confidentiality obligations.
  • Courts may grant injunctions or award damages to prevent or remedy disclosure of confidential information.
  • Intellectual property disputes often overlap with breach-of-contract claims, especially when confidentiality or licensing agreements are violated.
  • Remedies for breach include injunctions, compensatory damages, and in some cases punitive damages depending on the jurisdiction.
  • An intellectual property breach-of-contract lawyer can help businesses enforce contracts, protect sensitive data, and pursue legal remedies if agreements are broken.
  • The law of confidence provides long-lasting protection compared to patents or copyrights, often remaining in effect until information becomes public by independent means.

Breach of confidence intellectual property, also referred to as the law of confidence, is used to protect confidential information, like registered designs and patents, by keeping people who have obtained the information in confidence from using it to benefit while damaging the person or organization that shared the information. When seeking action against someone for breach of confidence, the main goal of the person filing the claim is to stop the other person from sharing confidential information that's of value to the one pursuing the action.

A Duty of Confidence

Breach of confidence is used as a remedy if confidential information is used or shared without the proper authority. A duty of confidence is formed when one person is given access to valuable information like trade secrets or sensitive information that is key to the way a business operates. The person receiving the confidential information then has the responsibility to not disclose the information to anyone else and not use the information for any reason other than the original intentions of the party sharing the information.

Common Scenarios of Breach of Confidence

Confidential information can be misused in many business contexts. Typical situations include:

  • Employment relationships: Employees leaving a company and using sensitive client lists or proprietary processes in a competing business.
  • Licensing agreements: Licensees exceeding the scope of permission to use intellectual property.
  • Business partnerships: One party disclosing strategic information to a competitor.
  • Professional relationships: Advisors, contractors, or consultants using insider knowledge beyond the purpose for which it was shared.

Courts generally examine whether the recipient of the information knew or should have known it was confidential and whether its disclosure caused harm.

Injunction to Restrain the Confidante

If the confidante makes a threat to divulge the sensitive information, The one who shared the information, the confider, has the right to file an injunction to stop the confidante from any unauthorized use of the confidential information. Some types of confidential information include trade secrets, personal information, business secrets, and professional information, such as:

  • Information obtained through research
  • Formulae
  • Production processes
  • Recipes
  • Results from testing
  • Source codes
  • Budgetary data
  • Client lists
  • Plans for marketing the business
  • Diaries and journals
  • Pictures
  • Private information about public figures
  • Information that was shared with a solicitor
  • Accounting information
  • Facts shared with a professional advisor

Remedies Available in Breach of Confidence Cases

When a confidante violates or threatens to violate confidentiality, several remedies may be available:

  • Injunctions to stop ongoing or imminent disclosure.
  • Compensatory damages for losses directly caused by the breach.
  • Account of profits, requiring the wrongdoer to hand over financial gains earned through misuse of confidential information.
  • Rescission or contract termination if the breach undermines the business relationship.

Damages may be higher when the breach involves intellectual property rights, such as copyrighted works or patented processes.

What Intellectual Property Is

Intellectual property is the legal rights attached to intellectual activity as it relates to industry, science, the literary field, and the artistic field. There are two main reasons countries have laws in place that protect intellectual property.

  1. The laws protecting intellectual property provide statutory expressions to the ethical and financial rights of the people who develop creations.
  2. Intellectual property laws also promote creativity along with the sharing and application of the results of creativity while encouraging a level of fair trade that boosts economic growth and social development.

Breach of Contract vs. Infringement of Intellectual Property

It is important to distinguish between breach of contract and intellectual property infringement:

  • Breach of contract arises when a party violates terms of a confidentiality or licensing agreement, such as sharing trade secrets contrary to an NDA.
  • Infringement occurs when intellectual property is used without authorization, regardless of a contractual relationship.

Sometimes both claims overlap. For example, a licensee may both breach a contract and infringe the licensor’s rights if they exceed the agreed use of a trademark or software license.

Ownership of Intellectual Property

The type of intellectual property being discussed is what determines who owns it. As an example, a trademark owner is a person or entity who receives the issued trademark. The owner of a copyright is determined by whether the copyrighted material, like computer software, was produced during the course of employment or on the creator's own time. If the copyrighted material was created through the creator's time as an employee, or under a contract of service, the employer then owns the copyright, unless the employee and employer agreed differently before the copyrighted material was produced.

The Role of Intellectual Property Breach-of-Contract Lawyers

An intellectual property breach-of-contract lawyer helps businesses:

  • Draft clear confidentiality, licensing, and non-disclosure agreements.
  • Enforce contracts when valuable trade secrets or IP are misused.
  • Navigate overlapping claims of contract breach and IP infringement.
  • Pursue remedies in court, arbitration, or negotiation to protect sensitive business assets.

These attorneys are especially critical when contracts involve cross-border transactions, complex licensing structures, or high-value intellectual property portfolios.

Commercially Valuable Information

The law regarding breach of confidence provides refuge for company secrets and information that has value on a commercial level. If there is an agreement between the employer and employee, even work produced outside the scope of work can be held as confidential information that's subject to breach of confidentiality laws. The law of confidence states that anyone connected with the production process has a duty of confidentiality. If the processes used to produce something are the key to its uniqueness, instead of the product itself, the law of confidence can be used to keep the method of production secret.

Preventive Measures to Protect Confidential Information

Businesses can reduce risks of breach of confidence by:

  • Requiring all employees and contractors to sign NDAs.
  • Using restrictive covenants in employment agreements.
  • Implementing access controls and data security systems.
  • Monitoring compliance with licensing terms.
  • Regularly training employees on confidentiality obligations.

These steps strengthen legal protection and make it easier to enforce confidentiality in disputes.

Duration of Protection from the Law of Confidence

The law of confidence stays in effect until another inventor discovers the process with no insight from parties bound by confidentiality laws. While patent protection covers 20 years, the law of confidentiality can remain in effect much longer. This applies to all types of commercial, private, and governmental information. It's an alternative to copyright, patent protection, and statutory design in the intellectual property field. There are several advantages of confidentiality rules, including:

  • There are no formal applications or registrations.
  • There are no fees to pay.
  • It doesn't have to be specified, because the circumstances at play when information is exchanged between the involved parties allow it to be implied.

Frequently Asked Questions

  1. What is the difference between breach of confidence and breach of contract?
    Breach of confidence involves misuse of confidential information, while breach of contract arises from violating an agreement’s terms. The two often overlap.
  2. Can I sue for damages if someone breaches an NDA?
    Yes. Remedies may include damages for losses, injunctions to stop disclosure, and in some cases disgorgement of profits gained from misuse.
  3. How long does protection under the law of confidence last?
    Unlike patents, which expire after 20 years, confidentiality protection lasts as long as the information remains secret and was not independently discovered.
  4. When should I hire an intellectual property breach-of-contract lawyer?
    You should consult a lawyer if confidential data, trade secrets, or intellectual property covered by a contract has been disclosed or misused.
  5. Is breach of confidence a criminal or civil matter?
    It is generally a civil matter, but in some jurisdictions misuse of certain confidential data (e.g., government secrets) can also carry criminal penalties.

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