Copyright for Confidential Information

26th April, 2024 - 7:11 am Categories: Copyright Patent Filing 0 Comments

This article refers to copyright and patent to be granted in case of confidential information and the requirements with respect to the same in order to prove liability. It also refers to various obligations that arise once a party is exposed to some confidential information and the remedies that are available. However, there is a need of Precise and effective definition of confidential information and related obligations are necessary for success in this increasingly competitive world.

COPYRIGHT FOR CONFIDENTIAL INFORMATION: 

Knowledge is called information and can be expressed orally or in writing. Information must be kept secret so that the creator and owner of the innovation can at the very least retain it as a form of property and have it governed by law.

Information that can be protected to provide its owner with a business advantage by maintaining confidentiality is referred to as confidential information. The owner must meet two requirements in order to maintain the confidentiality of any information:

 The data needs to be valuable.

 The data ought to be capable of receiving legal protection.

Another name for confidential information is trade secret. In the case of “Stephen John Coogan v/s News Group Newspapers Limited and Glenn Michael Mulcaire,” it was determined that although secret property is sometimes regarded as a component of intellectual property, it may not technically be “property” under the law.

Patent, Copyright and Confidential Information

It is necessary to compare the protection of private information offered by patent and copyright with that of confidential information because the subject is now too broad. In the age of technology concepts, confidence cannot be sustained in the long run unless the information is private and can be utilized for commercial purposes. In any case, the mechanical devices have the ability to reveal everything, therefore doing reverse engineering cannot be considered a violation of confidence. Even if the production process might not be visible, in that scenario the inventor might apply for a patent that would grant him temporary monopoly protection against other parties. The TRIPS agreement has numerous provisions addressing artists and inventors. In response to artists and innovators, the TRIPS agreement includes broad provisions requiring those legally in possession of confidential knowledge to be able to stop its unauthorized acquisition, disclosure, or usage in a way that goes against ethical business practices.

With the rulings in Prince Albert v. Strange and Morrison v. Moat, the boundaries of contemporary law, started to be established in about 1850. An injunction was issued in both cases to prevent the indirect receiving of private information, and the jurisdiction arose as a result of property, agreement, assurance, faith, and bailment. However, it was unclear then, as it is now, under what conditions recipients of information, both direct and indirect, would be held liable. The Court stated in Saltman v. Campbell that it had broader equitable jurisdiction and that it relied “not so much on property or on contract but on good faith.” The judiciary has largely adopted this stance to this day. The following places in this report, where these variations start to matter, must be identified. They specifically pertain to:

1. The responsibility of people who behave innocently in some way.
2. The conditions under which a breach may result in the award of damages.
3. The potential to award damages for emotional distress as opposed to monetary loss.
4. The results of trading in which the knowledge is considered property.
5. The recipient’s indirect liability.

Requirement of Liability

The requirements for what qualifies as an actionable breach of confidence are as follows. The information itself must, first and foremost, possess the required level of confidence. Second, the circumstances in which the information was disclosed had to imply a duty of confidence. Thirdly, the information must be used without authorization to the damage of the person who disclosed it.

Confidential Obligation

Establishing a prima facie case of culpability occurs when someone gives information to another under the understanding that the recipient will keep it confidential. The first party may also be required to do so if he hires someone else to gather information and keep it confidential on his behalf. But, the need of good faith is the foundation of the entire case. It must be determined objectively whether the acquirer or the recipient is obligated solely if he agrees to the confidentiality of the information. If the facts are such that any sane person in the recipient’s position would have realized that the information was provided to him in confidence on reasonable grounds, then this should be sufficient to impose with him the just duty of trust.

The distinction is that maintaining confidence may arise from fiduciary responsibility. The confidence that already exists will be destroyed by an employee who takes a secret report off of his employer’s desk. If an outsider performed the identical act, he would undoubtedly not be in violation of confidence but would still be guilty of trespass. The extent of the fiduciary duty may extend beyond the mere need to maintain confidence. For instance, even after the information is made public, the recipient might still be expected to use it exclusively for the benefit of his beneficiary. In addition, he might have to keep the earnings for his beneficiary in case of a breach of trust. Intervention with equity is meant to stop the fiduciary from taking a personal benefit from the potential duty and conflict of interest.

In India, a person may be required by contract to keep any information provided to him confidential. A technology transfer agreement’s restriction clause, which placed negative covenants on the licensee to refrain from disclosing or using the information obtained under the agreement for any purpose other than that specified in the agreement, has been affirmed by the courts. Even in the lack of a formal contract, the courts have granted injunctions by invoking a broader equitable jurisdiction. The defendant in VFS Global Services Private v. Suprit Roy was hired under a contract that allowed either party to terminate it with one month’s notice or payment. Later on, however, other conditions were added, prohibiting the defendant from communicating with a rival business for two years following the end of their employment. The employer that filed the appeal requested damages and the enforcement of the negative covenant. According to Justice  D.Y. Chandrachud, a condition that forbids an employee from divulging trade secrets or commercial information is not a limitation on trade; yet, it was noted that the relief requested was deemed to be incredibly ambiguous and did not only involve the non-disclosure of private information. Ultimately, the defendant had asserted that the relevant data was not confidential, However, he consented to uphold secrecy provided that the data was not publicly available.

In Bombay Dyeing and Manufacturing v. Mehar Karan Singh, the plaintiff filed a claim alleging that the defendant had given confidential information to a competitor while working for them, and the defendant expressed concern that the information would be revealed. The High Court was required to make a decision on the confidentiality claims. It was noted that data in the public domain has nothing to do with confidentiality. Anybody who has worked for a while will naturally become aware of some facts without having to make an extra effort. It wouldn’t have a secret quality just by using terms like strategy and important policies, since they may be predicted by any individual with foresight.

Remedies Available

In India, the only possible remedies for a breach of confidence are civil or equitable actions. The return of all “confidential and proprietary information,” the granting of an injunction “preventing the third party from disclosing the trade secrets,” and payment of damages “for any losses suffered due to disclosure of trade secrets” are among the remedies that are possible. The guilty party may also be required by the court to “deliver-up” these documents. Only those who have obtained access to any information through any of the rights granted by the Information Technology Act of 2000 and divulged that information may be the subject of criminal prosecution without the relevant person’s consent. There is a two-year maximum sentence as well as a fine of up to Rs. one million specified. Ad interim, permanent, and interlocutory injunctions are all possible. Generally speaking, an interim injunction will only be issued for a certain amount of time, based on the situation and the type of secret information involved. In the Gujarat Bottling Co. Ltd. case, the guidelines that the courts employ to decide whether to grant an interim or permanent injunction were summed up as follows:

The Court’s discretion must be used while deciding whether to award an interlocutory injunction while legal actions are pending. The following criteria are used by the Court when exercising its discretion:

 (i) does the plaintiff have a prima facie case;

 (ii) does the plaintiff have the advantage of the balance of convenience

 (iii) does the plaintiff stand to lose irreversibly if his request for an interlocutory injunction is denied?

The question of whether or not to issue an interlocutory injunction must be answered when the plaintiff is contesting the existence of a legally protected right and alleging that it has been violated; this uncertainty will persist until the facts are proven through evidence presented during the trial. Interlocutory injunctive relief is provided to the plaintiff to lessen the likelihood of injustice while the matter is still unclear.

However, the necessity of this protection must be balanced with the defendant’s equal need to be shielded from harm brought on by his inability to exercise his own legal rights, for which he was unable to obtain sufficient compensation. The Court must balance competing needs and establish the location of the “balance of convenience. “The “market value of the confidential information based on a notional sale between a willing seller and a willing purchaser” is the basis for determining damages.

CONCLUSION

In India, the body of law pertaining to secrecy duties is still relatively new. It seems that all confidentiality obligations—expressed or implied—will be upheld against any revelation or suspicion both during and after the term of the agreement, so long as the information is self-contained, not publicly available, and has undergone appropriate safeguards to maintain its sanctity and secrecy.

Upon an employee’s termination, burdensome clauses masquerading as confidentiality protections may be invalidated and declared unenforceable. Without a question, courts have supported a case-by-case approach and tried to take a balanced stance. Due to this, there are now a few minor discrepancies and confusion on how agreements’ confidentiality clauses should be interpreted. Even the TRIP requires its member nations to keep confidential information from being obtained, communicated to, or used without authorization by third parties.

Intellectual property laws, like the Designs Act and the Copyright Act, have been applied to stop the use of alleged sensitive data. Naturally, these tactics have only been supported by the courts in cases where the subject matter exceeds the legal protections for certain rights. The common law pertaining to confidential information has been acknowledged by the courts, who have also been steadfast in maintaining that certain agreements are contracts of faith and trust. Though the law of confidence is distinct, it has been proposed that the right to prohibit the use of secret information is more expansive than the copyright law. In Indian criminal law, there is no mention of secrecy; nevertheless, there are comparable laws that cover crimes like theft, fraud, and criminal breach of trust which, according to sections 379, 420, and 406 of the Indian Penal Code, has been used to fill the void and is punishable by jail time or penalties. Additionally, the Information Technology Act makes it illegal for a service provider to disclose any material containing personal information without the consent of the individual in question or in violation of a valid contract.

The importance of clearly defined business principles is unassailable in the face of growing globalization, particularly for a developing nation like India. Success in this ever more competitive world requires a clear and precise definition of sensitive information and the associated obligations. Although it might not be a cure-all, an enactment will give the current legislation more force. Ignoring this requirement will hinder innovation and advancement, which will lead to under performance in the nation.

Author: Shagun Brahmla, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

REFERENCES

[1]https://www.conjur.com.br/wp-content/uploads/2023/09/decisao-corte-apelacao-reino-unido.pdf

[2]https://vlex.co.uk/vid/morison-v-moat-804523293

[3]https://indiankanoon.org/doc/1547420/

[4]https://indiankanoon.org/doc/286447/

[5]https://indiankanoon.org/doc/175180860/

[6]https://indiankanoon.org/doc/1023088/

[7]https://supreme.justia.com/cases/federal/us/524/742/