Introduction

Unlike the statutory intellectual property rights, the action for breach of confidence was
developed by the common law. “Confidential Information” generally means information
which is not known to the public, or in the public domain, but is private to the company or
individual who possesses that confidential information. From a commercial perspective,
confidential information can include details of a company’s financial affairs, business
operations or customer engagements. A key type of confidential information could be a
company’s trade secret, such as a method or technique of manufacture which gives the
company an edge over other competitors. A person who has access to confidential
information is generally obliged under the law to keep the information confidential and
cannot usually disclose the information to third parties. If he does disclose the information, he
is said to have breached the obligations of confidentiality and is liable to legal action.

Breach of Confidential Information

A breach of confidentiality is when data or private information is disclosed to a third party

without the data owner’s consent. Whether an intentional breach, accidental error or theft, the
data owner is entitled to take legal action for potential losses or damage that comes as a result
of the breach of confidentiality.1 The law of breach of confidential information is aimed at
protecting secrets or commercially valuable information that may have been obtained in
confidence. Therefore, an action for reach of confidence protects confidential information by
preventing persons to whom the confidential information has been divulged in confidence
from using that information to gain unfair benefit for themselves, or further disclosure of
such information. The action for breach of confidence’s modern origins can be traced to
Prince Albert v Strange.2 The remedy most often sought for threatened breaches of
confidence was an injunction, and the action is founded on a fundamental basis of a
relationship which gives rise to an obligation in conscience to maintain confidence.3 Dicta in
modern cases suggest that the consensus now reached by the courts is that breach of
confidence is an equitable jurisdiction founded on ‘good faith’. Lord Denning MR said in
Seager v Copydex Ltd4 that: ‘The law on this subject … depends on the broad principle of
equity that he who has received information in confidence shall not take unfair advantage of

1
https://www.hiscox.co.uk/business-insurance/professional-indemnity-insurance/faq/what-is-breach-of-
confidentiality, 16/03/20, 2252.
2
(1849)
3
C. Colston, (1999). Principles of Intellectual Property Law. London: Cavendish Publishing Limited.
4
(1967)
it.’The elements of the action for breach of confidence were laid down by Megarry, J. in the
case of Coco v. AN Clark (Engineers) Ltd.5 The plaintiff sought an injunction against the
manufacture and sale of any machines in which the defendants had made use, directly or
indirectly, of any confidential information the property of the plaintiff. Megarry, J. identified
three elements required to establish the action for breach of confidence. He stated as follows:

1. First, the information itself must ‘have the necessary quality of confidence about it.’

2. Secondly, that information must have been imparted in circumstances imposing an

obligation of confidence.

3. Thirdly, there must be an unauthorized use of that information to the detriment of the party
communicating it.

The plaintiff, was however, not granted the injunction. Though the information was passed on
an occasion of confidence, it was neither clear that the nature of the information was
confidential nor could the plaintiff establish clear misuse of the information.

Confidential Quality
The law of confidence does not require information to be completely secret in order to be
considered confidential. Information will be protected provided that it is limited in the scope
of its availability. The information to be protected must not be common or public knowledge
or a matter of public record. Information which is not readily available to the general public
is capable of protection, but once information becomes publicly available or known by a
substantial number of people it will lose its confidential character.

In Dalrymples Application6, a manufacturer distributed over 1 000 technical bulletins

containing information about a new manufacturing process to members of a trade association.
The bulletins were marked ‘Confidential’ and contained a notice that the contents of the
bulletin should not be disclosed to non-members. The court refused to find that the
information was confidential in this case because it was felt that the trade association had not
taken sufficient steps to ensure that the information could not be accessed by non-members.

Confidential Obligation
The second requirement in an action for breach of confidence is that there must be obligation
of confidence which arises from the circumstances in which the information was imparted.

5
CHD 1968
6
IN THE MATTER OF J R DALRYMPLE’S APPLICATION FOR A PATENT: 1957
This obligation may arise by express agreement or prior notice, or it may be implied by law,
for instance, in a fiduciary relationship or by general equitable principles.

Unauthorised use of Confidential Information

The third element in an action for breach of confidence is the unauthorized use of
confidential information to the detriment of the party communicating it. The obligation of
confidence obliges the recipient of confidential information to make use of it for only those
purposes specified either explicitly or implicitly by the owner of the information.

The person obliged may not make use of the information himself or disclose it to others. A
breach of confidence need not be deliberate and if any person fails to take reasonable care to
identify and look after confidential information that has been passed to him, then he will be
liable for breach of confidence through negligence. In Seager v. Copydex7 it was held that the
defendants had unconsciously copied the plaintiff’s design idea and used the information
imparted to them during confidential negotiations.8

Besides the unauthorised use of information, the plaintiff must establish proof of detriment or
loss suffered as a result of the unauthorized use of his confidential information. In Attorney-
General v. Guardian Newspapers Ltd (No. 2)9, Lord Keith considered as orbiter that the
unauthorised disclosure of confidential information would in itself constitute proof of
detriment to the plaintiff without further proof of actual financial loss.

The law of confidence and privacy

There was no fundamental right to privacy at English law. Occasionally, invasions of privacy
may have been dealt with under the law of breach of confidence but this area of law did not
provide a comprehensive and seamless law of privacy. This was changed by the Human
Rights Act 1998 which gives effect, inter alia, to the rights and freedoms guaranteed under
the Council of Europe Convention for the Protection of Human Rights and Fundamental
Freedoms 1950 (the ‘Human Rights Convention’).Article 8(1) of the Convention states that:
‘everyone has the right to respect for his private and family life, his home and his
correspondence’.10 This is subject to possible derogation for a number of purposes including
national security, the prevention of crime or the protection of the rights or freedoms of others.
The weakness of the law of confidence in providing a remedy for invasions of privacy before
7
CA 1967
8
D.I. Bainbridge, (2007). Intellectual Property Law, (6th Ed). United Kingdom: Pearson Education Limited.
9
[1990] 1 AC 109.
10
Data protection law, which itself finds its roots in the Human Rights Convention, may also have an impact.
the Human Rights Act 1998 was highlighted by the case of Kaye v Robertson11 in which a
journalist and a photographer gained access to Mr. Gordon Kaye’s private hospital room and
took photographs and conducted an interview when Mr. Kaye was in no fit state to be
interviewed or to give consent. Mr. Kaye, the actor from the television comedy series ‘Allo
Allo’, had, while driving, been struck by a piece of wood and suffered severe head and brain
injuries. In allowing in part the appeal against an injunction imposed by Potter J, the Court of
Appeal judges were unanimous in their call for a legal right to privacy.12 Of course, since the
Human Rights Act 1998, it is unlikely that Kaye v Robertson would today be decided the
same way on the issue of privacy.13

Since the assimilation of human rights law into the laws of the UK, there have been some
important developments in the courts, building on and supplemented by decisions of the
European Court of Human Rights. It is now clear that the Convention Rights apply not only
to protect individuals against arbitrary interference with the rights by public authorities but
also, in relation to the right of respect for private and family life, to impose obligations on
states to secure respect for private or family life even in the context of relations between
individuals. This was made clear in von Hannover v Germany14 in which photographs were
taken by the press of Princess Caroline of Monaco in public places. It was held by the
European Court of Human Rights that her right of privacy had been breached. The
photographs did not relate to her duties, obligations or suchlike as a Princess but showed her,
for example, in a restaurant with a friend, on horseback, on a skiing holiday and with her
children. This seems to go a little further than Campbell v Mirror Group Newspapers, infra,
which English courts below the House of Lords are bound to apply. In Murray v Express
Newspapers plc,15 a photographer with a camera with a long-range lens took a photograph of
J K Rowling’s son, then under two years old, in a pushchair on a public street accompanied
by J K Rowling and her husband. The photograph was taken without their knowledge or
consent. Taking and publishing photographs of innocuous acts, such a taking a bus or
walking down a street should not give rise to an action for breach of confidence or invasion
of privacy. Such activities do not raise an expectation of privacy. According to Lightman J (at
11
[1991] FSR 62
12
Although the libel claim failed, the action for malicious falsehood succeeded but only in as much as the
defendant could not claim that the interview had taken place with Mr Kaye’s consent. For contemporary
articles on the then perceived need for a law of privacy, see Markesinis, B.S.I. ‘Our Patchy Law of Privacy –
Time to Do Something About It’(1990) 53 MLR 802; and Prescott, P.‘Kaye v Robertson – a Reply’(1991) 53 MLR
451. See also the Calcutt Committee Report, On Privacy and Related Matters, Cm 1102, HMSO, 1990.
13
David I Bainbridge, (2007). Intellectual Property Law, (7th Ed). United Kingdom: Pearson Education Limited.
14
(2005) 40 EHRR 1.
15
[2007] ECDR 328.
para 65) ‘If a simple walk down the street qualifies for protection then it is difficult to see
what would not’. Although he expressed sympathy for persons wishing to shield their
children from intrusive media attention, as it stands, the law does not allow them ‘. . . to carve
out a press-free zone for their children in respect of absolutely everything they choose to
do’.16 Article 10 of the Human Rights Convention provides for the right of freedom of
expression. This right is also subject to derogations but there is ample opportunity for this
right to conflict with the ‘right of privacy’. In some respects, it could be claimed that the law
of confidence has developed to provide a balance, for example, by protecting the right of
privacy subject to disclosure in the public interest. Lord Nicholls in the House of Lords in
Campbell v Mirror Group Newspapers Ltd17 went so far as to say that the law of breach of
confidence had developed to such a stage that it represented the UK’s implementation of the
Convention rights of privacy and freedom of expression. He said (at para 17): The time has
come to recognise that the values enshrined in arts 8 and 10 are now part of the cause of
action for breach of confidence. As Lord Woolf CJ has said, the courts have been able to
achieve this result by absorbing the rights protected by arts 8 and 10 into this cause of action.
18
Further,it should now be recognised that for this purpose these values are of general
application. The values embodied in arts 8 and 10 are as much applicable in disputes between
individuals or between an individual and a non-governmental body such as a newspaper as
they are in disputes between individuals and a public authority. Later, in the Court of Appeal
in Douglas v Hello! Ltd (No 6),19 Lord Phillips of Worth Matravers MR said that the courts
should develop, as far as they can, the action for breach of confidence so as to give effect to
the Convention rights under Articles 8 and 10.20 In that case, photographs were taken
surreptitiously at the wedding of Michael Douglas and Catherine Zeta-Jones, who had ‘sold’
the exclusive rights to take photographs to OK! Magazine for £500,000 each. The
unauthorised photographs were published in the defendant’s magazine. The Court of Appeal
confirmed that there had been a breach of the Douglas’s right of privacy and a breach of what
was described as their commercial confidence. It was accepted that persons in the public eye
who seek publicity have a right in their image as a commodity which can be dealt with as
with any trade secret. In the circumstances of the case, the official photographs were such a

16
At para 66. Of course, if the media attention causes alarm or distress, there may be remedies under the
Protection from Harassment Act 1997 which includes criminal penalties and civil remedies.
17
[2004] 2 AC 457.
18
A v B (a company) [2002] EWCA Civ 337 at [4],[2002] 2 All ER 545 at [4],[2003] QB 195
19
[2005] 3 WLR 881.
20
McKennitt v Ash [2007] 3 WLR 194 where Buxton LJ said (at para 11) ‘. . . in order to find the rules of the
English law of breach of confidence we now have to look at the jurisprudence of Articles 8 and 10’.
commodity that the Douglas’s had a right to keep secret until the time they chose to make
them public. Ordinary individuals with no ‘celebrity’ status would not necessarily have a
commercial confidence though they do have a right of privacy. However, the Court of Appeal
held that OK! Magazine had no right of commercial confidence it could invoke against Hello!
Magazine, that the obligation of confidence owed to OK! Magazine only covered the
photographs taken on its behalf and no others. The House of Lords, by a 3:2 majority in co-
joined cases known as OBG Ltd v Allan,21 reversed the Court of Appeal decision in Douglas
v Hello! to the extent that it had held that OK! Magazine had no right of commercial
confidence. Photographs of the wedding were confidential in the sense that none were
available publicly.22 It had been made clear to everyone attending that no one other than the
authorised photographer was to take photographs of the wedding. That imposed an obligation
of confidence for the benefit of OK! Magazine as well as the Douglas’s. Publishing the
unauthorised photographs clearly caused a detriment to OK! Magazine and, consequently, all
the ingredients of a breach of confidence action set out by Megarry J in Coco v Clark, infra,
were present. There was no public policy reason why the law would not protect information
of a particular sort only, photographic images as distinct to information about the wedding
generally. Photographic images were commercially valuable and the Douglas’s had exercised
sufficient control to impose an obligation of confidence. The public interest defence,
described in more detail later, was narrowly construed in the Campbell case. The supermodel
Naomi Campbell had previously claimed that she did not have a drug addiction just as Chama
Kumanda was. The defendant newspaper published articles showing that she had been
undergoing treatment at Narcotics Anonymous. The articles included details about the
treatment she was undergoing and photographs showing her leaving meetings of Narcotics
Anonymous with others undergoing treatment. The House of Lords, by a three to two
majority, held that this was a breach of confidence. Whilst it was acceptable to publish a story
about her having lied about taking drugs and her addiction and the fact that she was receiving
therapy, publishing the additional information about the treatment with Narcotics
Anonymous together with details of the treatment and the photograph went too far. Of course,
publishing any of the information would have been a breach of confidence apart from the fact
that Naomi Campbell was someone who sought publicity and was a role model.

21
[2007] 2 WLR 920. This involved appeals in three cases on the tort of inducing a breach of contract or causing
loss by unlawful means and, in the appeal by OK! Magazine, also an appeal against the finding of the Court of
Appeal on whether OK! Magazine had a commercial confidence which it could enforce against Hello! Ltd.
22
Of course, the confidential quality in relation to the authorised photographs was lost once they were
published but this did not affect the confidential nature of any other photographs.
This decision puts into doubt the correctness of some earlier cases, especially Woodward v
Hutchins,23 described later, in the level of detail of information that can be published on the
basis of public interest where publicity-seeking celebrities are concerned. However, an
important point made in Campbell in the Court of Appeal was that publishing the additional
information and photograph was important to give credibility to the story. In the House of
Lords one of the dissenting judges, Lord Hoffmann, said that some editorial latitude should
be allowed. Given the exigencies of newspaper publishing, it is not always possible to judge
to a nicety what should and should not be published. This is particularly so in relation to
photographs which readers have come to expect. Lord Nicholls, also dissenting, said of the
balance between privacy and freedom of expression (at para 28): The balance ought not to be
held at a point which would preclude, in this case, a degree of journalistic latitude in respect
of information published for this purpose.

Conclusion

Where the balance between privacy and freedom of expression lies may depend on the
context and it may lie more towards the freedom of expression end of the spectrum where the
information relates to politics rather than in the case of film and television celebrities. What
these cases show is that even celebrities have a right of privacy and, whilst it might be
acceptable to publish a photograph of a famous person walking down a public street, it would
not necessarily be acceptable, per se, to publish a photograph of such a person engaged in a
private meeting even if it takes place in a public place. Of course, a right to privacy is not
central to the law of breach of confidence in an industrial or commercial context and the
following discussion of the modern law of breach of confidence focuses on the impact and
development of this useful area of law in relation to industrial and commercial information
including ‘trade secrets.’

23
[1977] 2 All ER 751
Bibliography

Books

1. C. Colston, (1999). Principles of Intellectual Property Law. London: Cavendish Publishing

Limited.

2. David I Bainbridge, (2007). Intellectual Property Law, (7th Ed). United Kingdom: Pearson
Education Limited.

3. David I Bainbridge, (2009). Intellectual Property Law, (7th Ed). United Kingdom: Pearson
Education Limited.
Statutory Law

1. Council of Europe Convention for the Protection of Human Rights and Fundamental
Freedoms 1950

2. Human Rights Act 1998

Case Law

1. Prince Albert v Strange 1849

2. Woodward v Hutchins [1977] 2 All ER 751

3. OBG Ltd v Allan [2007] 2 WLR 920.

4. McKennitt v Ash [2007] 3 WLR 194

5. A v B (a company) [2002] EWCA Civ 337 at [4],[2002] 2 All ER 545 at [4],[2003] QB

195

6. Douglas v Hello! Ltd (No 6) [2005] 3 WLR 881.

7. Campbell v Mirror Group Newspapers Ltd [2004] 2 AC 457.

Websites

https://www.hiscox.co.uk/business-insurance/professional-indemnity-insurance/faq/what-is-
breach-of-confidentiality, 16/03/20, 2252.