Confidential Information - Protecting Your Ideas

Often artists and writers want another person to consider their original ideas before any contract is entered into for the commercial use of the ideas.  By disclosing the ideas to others, though, they may fall prey to the unscrupulous who copy them or pass them on to others, without permission or payment.

The law of confidential information is the legal means available for the protection of secrets, including ideas, outside of any contract.  Other laws that protect intellectual property such as copyright or passing off may be of limited use.  Copyright only protects the expression of ideas, not the idea itself.  To argue a case of passing off successfully (such as that someone is representing to the public that your work is their own), you must prove that you and your idea are already known in the market place.

What is the law of confidential information?

Essential elements

The law of confidential information prevents the unauthorised use and disclosure by a person of another’s confidential information, including ideas, that are communicated in trust and confidence. There are 3 requirements:

• nature of information:  the information must be of a "confidential" nature;
• nature of communication:  the information must have been communicated in circumstances that indicate that the person receiving it must respect its confidential nature;
• nature of use:  there must be unauthorised use (this can include unauthorised disclosure) of the information to the detriment of the party communicating it.

It is up to the person asserting confidentiality to establish these requirements.

Nature of information

The confidential information must not be public knowledge, there must be an element of secrecy. The distinction, however, between information that is confidential and that which is public knowledge is sometimes hard to determine.  In assessing whether information is of a confidential nature, a court will look at:

1. the value of the idea to the artist;
2. the extent to which the idea is known or has been disclosed to others, and whether that disclosure was made on a confidential basis;
3. the ease or difficulty with which those ideas could be duplicated independently by others;
4. the extent of the measures taken by the artist to keep the idea secret.

The law of confidential information is not limited to any particular type of information but the information must be reasonably ascertainable.  The law has been used to protect a broad range of information.  For instance, it has been used to protect information about Aboriginal cultural and religious ceremonies (Foster and Others v Mountford and Rigby Ltd [1977] 14 ALR 71); information concerning the genetic structure of a tree (Franklin v Giddens [1978] Qd R 72); a scenario for a series of television programs (Talbot v General Television Corporation Pty Ltd [about 1980] VR 224); and unpublished artistic works (Prince Albert v Strange 47 ER 302).

Practical steps

Steps to protect confidential information include:

• beginning any conversation with words to the effect that the information, including ideas, disclosed are confidential and must not be discussed with anyone without first obtaining your [written] consent. 
• marking any documents submitted "CONFIDENTIAL".  If copyright subsists in your documents, also include the copyright owner's notice.  You can go further and mark each document with this notice:

"The information in this document is confidential and must not be used or without first obtaining [name]’s written consent."

• best of all, to have the person or organisation which is to receive the information sign a confidentiality agreement before you communicate any idea or submit any confidential documents to them.  You may then also have an action for breach of contract against the recipient of the information if the information is used or disclosed without your permission.  Be aware, though, that organisations can be reluctant to enter into these kinds of contracts.  A sample confidentiality agreement is included in this information sheet.

It is, of course, always prudent to submit copies of documents, rather than originals, whenever possible.

More information

• Arts Law Centre of Australia.  Telephone (02) 9356 2566 or toll-free outside Sydney on 1800 221 457. 

Information and publications on copyright may be obtained from the:

• Australian Copyright Council for information and advice on copyright on (02) 9318 1788.  Their website is at www.copyright.org.au

Sample short form Confidentiality Agreement