In addition to the protections afforded by contract, obligations of confidentiality arise in equity that are legally enforceable against the recipients of confidential information. Such obligations will arise where:
- information was received with the understanding that it would be treated confidentially; or
- the recipient ought to have realised in all the circumstances that the information was to be treated confidentially.
Breach of the duty of confidence
A recipient of confidential information will breach the duty of confidence where they use the confidential information in an unauthorised way, to the detriment of the owner of that information. Unauthorised use may include both unauthorised disclosure and intellectual use, such as the use of a trade secret to build a competing product.
The duty of confidence will not be breached if information that was disclosed in circumstances of confidence has entered the public domain. There is also a risk that the court will not uphold the duty if the discloser does not act quickly to restrain the breach.
The courts may provide injunctive relief to restrain an initial or future breaches of the duty of confidence. It is vital when seeking injunctive relief to act quickly to restrain the breach. Declarations, an account of profits and the delivery up of documents can also be ordered as a remedy for breach of confidence.