and private secrets
This page considers protection for personal and commercial
information under common law, contract law and other confidentiality
It covers -
is complemented by discussion elsewhere on this site regarding
intellectual property and privacy, along with a more detailed
note on particular
Australian and other societies are founded on expectations
that information can be imparted 'in confidence' to personal
and business contacts (including colleagues, subordinates,
lawyers, government officials and health service providers)
without unauthorised disclosure.
That provision of information might involve intimate matters,
for example regarding an individual's health or the health
of a person for which that individual is responsible.
It might involve legal representation, participation in
a census or banking and insurance activity.
It might instead involve the protection of what is often
refererred to as 'trade secrets', 'know how' or merely
'commercial confidentiality'. That protection can serve
as a surrogate for intellectual property protection such
as copyright and patents, with
a businss for example avoiding the disclosure (and finite
period of protection) associated with registration of
a patent. It can provide protection
for culturally sensitive information provided by indigenous
communities to anthropologists and curators.
More broadly it embodies notions of trust and obligations
on a personal and corporate basis.
Confidentiality does not provide an ethical or legal obligation
to keep any and all information secret in every circumstance.
Instead it centres on a duty to use particular information
- typically identified through some form of notification
or through the nature of the context in which it is imparted
- only for the purposes for which it was provided.
Justice will on occasion override that duty, for example
to preserve the life of a medical patient or the patient's
associates (as noted later in this guide), for national
defence or law enforcement. There is thus no absolute
right of confidentiality in information imparted by criminals
to each other for breaches of law.
Other pages in this guide consider official secrecy and
the extent of protection for particular relationships
- eg between doctors and patients, lawyers and clients,
clergy and penitents - and people engaging in whistleblowing
(ie unauthorised disclosure in the public interest). The
following paragraphs explore protection of trade secrets,
know-how and other business information under common law
and contract law, with brief reference to some other law.
It is important to emphasise that confidentiality is not
narrowly restricted to commercial entities or particular
classes of information. The incidents highlighted in the
supplementary note on confidentiality cases demonstrate
that law has been used to protect a broad range of information,
including unpublished artistic works (Prince Albert
v Strange), genetic research (Franklin v Giddens),
cultural sensitive material regarding Indigenous ceremonial
(Foster and Others v Mountford and Rigby) and
a television program scenario (Talbot v General Television
As the preceding paragraphs indicate, the term 'confidentiality'
is often used loosely. Recognition of confidentiality
in statute law and courts varies from jurisdiction to
In considering protection for concepts and information
(for example business proposals, industrial processes
and research) it is common to refer to know how and trade
secrets. Such protection has encompassed the formula for
major consumer products such as Coca Cola and
the unpublished information necessary to make effective
use of some chemical or pharmaceutical patents.
In Australia the term trade secrets has
connotations of commercially sensitive information - secrets
- relating to production of goods and provision of services.
Such information often results from and embodies expertise
It is sometimes differentiated from know-how,
which refers to information that is valuable to a business,
that is not generally available but that could be assembled
at considerable cost by competitors.
Such secrets are not necessarily kept in people's heads.
Some organisations for example document the knowledge
in great detail and protect that information through -
restrictions (eg the manual is kept within a particular
production facility, research laboratory or office)
measures (the document uses 'copy proof' paper or a
database is encrypted and password protected) - discussed
in the following page of this guide
(information is imparted to a narrow range of people
who have a contratual relationship with the owner/guardian
of that information)
to equity (common law) and statute law dealing with
particular types of information and relationships (eg
the national census, taxation and privacy statutes in
corporate culture that secures the commitment of employees
(ie people choose to do the right thing on an informed
and ethical basis rather than through coercion).
Treatment of confidential information under the law of
equity seeks to prevent unauthorised use and disclosure
by one entity of another's confidential information, including
ideas, that are communicated in trust and confidence.
Equity coexists with intellectual property, privacy and
It broadly has four requirements regarding the nature
information - the information must be of a confidential
character and thus for example must not be common or
identification - the information must be specifically
identified (although not necessarily in writing) and
not merely in 'global' terms
communication - the information must have been imparted
in circumstances that indicate that the recipient (an
organisation or individual) must respect its confidential
use - there must be unauthorised use or threatened misuse
(which includes unauthorised disclosure) of the information
to the detriment of the entity that communicated it.
common law the onus is on the person asserting confidentiality
to establish those requirements. That person may take
action for breach of confidence in equity.
It is important to note that a contractual obligation
binds only the parties to the contract. Equity, in contrast,
can restrain a third party from disclosing confidential
information where that party is aware (eg through a notice
or through the circumstances in which information is obtained)
that disclosure is unauthorised.
Organisations and individuals often do not rely solely
on equity but instead seek to reinforce their position
(and ensure the awareness of those to whom they entrust
information) through use of formal agreements. Many agreements
are founded on contract law, although it is common for
entities to use non-disclosure agreements while formal
contracts are under consideration.
Confidentiality obligations under contract may involve
employees or a commercial relationship with another entity
(eg between two businesses or between a business and a
government agency). Questions of privity - essentially
the difficulty of enforcing contractual obligations on
third parties outside the relationship - mean that common
law and other statute law (eg privacy law) may be important.
Confidentiality features in commercial agreements typically
relating to information in a tangible form (eg in a
paper or electronic document)
for a specified duration
information that is referred to either by name or in
more general terms but whose status is signalled through
being marked in a particular way such as 'confidential',
'commercial-in-confidence' or 'proprietary & confidential'
of exemptions to non-disclosure so as to ensure consistency
with with statutory obligations and the general law.
frequently include information that is communicated orally,
subject to that information being presented in tangible
form within a stipulated time following provision at a
meeting or by phone. That restriction can be particularly
useful in controlling information provided during discussions
prior to the agreement.
As the obligations bind only parties to the contractual
agreement confidentiality clauses often require an indemnity
regarding loss or damage for unauthorised disclosure by
employees, officers or servants of the entity to which
information is imparted. Some agreements instead require
that the entity ensures there is no unauthorised disclosure
by those persons.
licence agreements typically identify the licensor's obligations
(eg provision of technical assistance, training and documentation
needed in carrying out the matter that is the subject
of the agreement) and the licencee's obligations. The
latter generally encompass nondisclosure of confidential
information, use of that information only for the purposes
specified in the agreement and restriction on market the
product/service in the territory assigned by the licensor.
Such an agreement will reflect non-disclosure agreements
and usually be underpinned by a licence to reproduce copyright
material (eg training manuals and operational guides)
produced by the licensor.
Most nations provide some protection for confidentiality
in a range of legislation, including -
law specific to government agencies and operations
law on privacy
Australia for example federal and state/territory legislation,
such as the Commonwealth Crimes Act 1904 (discussed
earlier in this guide) and Census & Statistics
Act 1905, includes provisions aimed at ensuring confidentiality
within government through for example penalties regarding
unauthorised disclosure of particular classes of information.
Those provisions are not absolute and, for example, coexist
with archives and freedom of information enactments.
noted elsewhere on
this site, Part VIII of the federal Privacy Act 1988
imposes an obligation on third parties who have received
personal information provided in confidence. Section 93
of the Act enables recovery of damages by the confider
and by the individual/s to whom information relates. Section
91 of the same Act preserves the operation of other law,
including common law.
For a UK perspective see Confidentiality (London:
Sweet & Maxwell 2006) by Charles Phipps & Roger
Later pages of this guide highlight studies on professional
privilege, ethics and responsibility, in particular medical
obligations. Salient works include Sabine Michalowski's
Medical Confidentiality & Crime (Aldershot:
Ashgate 2003), Loane Skene's Law & Medical Practice:
Rights, Duties, Claims & Defences 2 ed (Chatswood:
LexisNexis Butterworths 2004), and papers in Disputes
& Dilemmas in Health Law (Leichhardt: Federation
Press 2006) edited by Ian Freckelton & Kerry Petersen