Law of Confidence - Copyright & Patent Protection

Title: The law of confidence has been unable to supplement copyright and patent

protection especially in the early stages of a product or service when there is

nothing tangible or substantial enough for copyright law or patent to protect.

Introduction

The above statement suggests that it is not possible to view the law of confidence as a catch all category of intellectual property protection. In this piece, this possible role for confidence will be explored in full and an explanation as to why it either does or does not fulfil this type of role will be given. Within the course of this investigation, the accurate function for the law of confidence will also be provided. Part A will therefore begin by presenting the key features that define the law of confidence and identify those that are relevant to the current topic, which is the exploration of the law of confidence as a reputedly incapable catch all method for subject matter that is too insubstantial for the purposes of patenting and too intangible for the application of copyright law.

Part two will then compare patenting to the requirement of necessary quality under the law of confidence and, through the examination of case law, establish instances where confidentiality is and is not an appropriate catch all facility for non-patentable inventions. Part three will facilitate the same purpose for copyright and reference will be made to the potential outcome of differing conclusions for each of the types of intellectual property of patents and copyright.

Upon the conclusions reached in Part two, it will be established whether the law of confidence has been unable to supplement copyright and patent protection in the early stages of a product or service when there is nothing tangible or substantial enough for copyright law or patent to protect

Part One – the requirements of confidentiality – sole relevance of necessary quality

The law of confidence is the protection of secrets that as contract matter, is governed by the common law and, unlike patent and copyright protection there are no applicable statute or international treaty that governs this corner of intellectual property. The requirements of the law of confidentiality were identified in the case of Coco v A.N. Clark (Eng) Ltd^[1] where Megarry J identified three key requirements for there to be protection under the law of confidence, namely, necessary quality, the requirement of an obligation of confidence and the occurrence of unauthorised use of the information. The first requirement of necessary quality relates entirely to this topic as it wholly pertains to the issues tangibility and substantiality of the subject matter. The second and third points do not possess such attributes and for this reason, they will not be explored in depth in this paper except in so far as, should an invention or work of an early stage require protection, these latter two requirements will have to be met in their own right.

The necessary quality of confidence is essentially the requirement that the subject matter must not be in the public domain. Lord Greene MR stated in Saltman Engineering Co v Campbell Engineering Co^[2], there must be:

“necessary quality of confidence about it, namely, it must not be something which is public property and public knowledge.^[3]“

A further aspect to necessary quality, as was espoused in relation to trade secrets by Lord Parker in Herbert Morris Ltd v Saxelby^[4] was that the information cannot be simple to the extent that it can be, “carried in the head.” It therefore must not be easily memorable. This is not however overly conclusive and in addition to the above, there was the continued condition of Megarry V-C of a further four elements. These are that, firstly, the owner must believe that release of the information would be injurious to himself and advantageous to rivals. Secondly, the owner must believe that the information is confidential or secret. Thirdly, these beliefs require to be reasonable and, finally, they require to take into account trade practice.

For the purposes of this paper, the essential features of ‘necessary quality’ are that the subject matter need not be tangible and there also appears to be a rather low requirement for quality. Both of these features are highly significant to a relationship with products or services that are in early stages where there is a potential for future patentability or copyright.

Part Two – Comparison of patenting to necessary quality

A.Necessary quality and patenting

Patent law falls under the UK Patents Act of 1977, which was implemented for the purpose of harmonisation to fall in line with the provisions of the 1973 Munich Convention on the European Patent (EPC)^[5] and the 1975 Luxembourg Convention on the Community Patent (CPC)^[6].

In accordance with this act there are three requirements for patentability, which are that the invention^[7] has to be novel, must constitute an inventive step and have an industrial application.

Briefly, novelty requires that the invention must be state of the art and also that it cannot have been disclosed to such an extent that this novelty has been destroyed. As a comparison to the law of confidence it is clear that the physical requirements for the subject matter are far more detailed and demanding than that of the law of confidence that requires mere non-disclosure. In fact the closest that the law of confidence comes to the complexity requirement is that Lord Parker’s inconclusive requirement for the information to be more than something that can be carried in the head^[8].

B.Successful recourse to Confidentiality where the

invention is not patentable

The above statements of the title states that there has been an inability to utilise the law of confidence where the subject matter was not substantial or tangible enough for copyright or patent protection. Case law does however show that it is feasible where the product is not an inventive step. This would include such items as tonics made from natural ingredients^[9] that are naturally unpatentable. In Morison v Moat^[10] Tuner, which concerned the recipe for a medicine, Turner V-C stated that confidentiality is also superior from the point of view that it is perpetual for the duration of its absence from the public domain.

With regard to products and services that are in their early stages, there is no feasible reason why the as-of-yet non-patentable material cannot be party to a confidentiality agreement. The only prerequisites to this would be the requirement of an obligation of confidence and these can take the form of employment contracts, fiduciary relationships that require confidentiality and third parties with appropriate knowledge of the confidentiality of the product. There is however one paradox which is explained below.

C.The serious clash of disclosure in the public domain via

patent application and the law of confidentiality.

Where however a patent has been applied for, the information becomes part of the public domain as a result of the publication of the subject matter as part of the patenting application process. This was the finding of the House of Lords in the case of O. Mustard & Son v S Allcock & Co Ltd and Dosen.^[11] This therefore means that the law of confidence cannot be reverted utilised in the event that the patent application is unsuccessful.

The result of this is that the only way in which recourse may be had to confidentiality where the patent is insubstantial is at any time until the registering of the patent or disclosure of the secret. This places a limit on the use of confidentiality as a pre-patent protection mechanism but it does not remove it completely.

Part Three – Comparison of copyright to necessary quality

AOriginality and Tangibility under Copyright

Law

In accordance with the UK Copyright and Designs and Patents Act 1988, copyright protection is available to all artistic, literary, dramatic and musical works that are original. The definition of original is not an indication of quality, but is merely a requirement for the work to have originated from the author. Peterson J states in the case of University of London Press v University Tutorial Press that:^[12]

“…The word ‘original’ does not in this connection mean that work must be the expression of original or inventive thought. Copyright Acts are not concerned with the originality of ideas, but with the expression of thought, and in the case of ‘literary work’, with the expression of thought in print or writing…^[13]“

It is therefore clear that, unlike the law of patenting, both copyright and the law of confidence share the characteristic of quality being no fundamental prerequisite to protection. The only other requirement for copyright protection is that the work has to have been manifested into a tangible form, such as writing on paper, a sound recording or performance on stage.

B.The hypothetical, use of confidentiality prior to the tangibility of the work.

Given the above low threshold for originality and the relative ease of creating tangibility in works, it is arguable that it would be difficult to find a scenario where it would be necessary to use the law of confidence as an alternative to copyright where the subject matter was not worthy of such protection. One reason for this is that a work that is not original under copyright law is likely to have already entered the public domain. In addition to this, secondary works that are deemed to be a new angle or flare added by another author to an existing work would be protect able under copyright law but would already have entered the public domain for the purposes of confidentiality law protection.

The only clear scenario where the law of confidentiality could be used as an alternative to copyright would be the humming of a tune or the divulgence of a storyline by the author to another party prior to the manifestation of this work in a tangible form. This occurred in the case of Fraser v Thames Television Ltd^[14] in which Thames produced a program that was divulged to them in its early stages of conception, prior to copyright tangibility. It was produced without the conditional engagement of the authoring actresses in the lead roles who had earlier divulged their story idea to Thames. The plaintiffs won the case of breach of confidentiality on the basis that the requirement for tangibility was, unlike for copyright, not a requirement for the law of confidence. Hirst J did however reiterate the findings in Herbert Morris Ltd v Saxelby^[15] in that the idea, although not tangible, had to be:

‘…sufficiently developed so that it would be seen to be a concept…which is capable of being realised as an actuality…^[16]‘

This case clearly shows that while situations do exist for the use of confidentiality on intangible works, it is clear that, as with patents there are limitations to this use. However the difference with Copyright is that the limited use of confidentiality is attributable, not by virtue of the strictness of copyright, as is the case with patents, but by virtue of the flexibility of copyright, in that all that stands between the confidential idea and the original work is the act of recording it into a tangible form. It is therefore difficult to find a need for confidentiality where all that is needed is to create a tangible form.

Conclusion

As far as the use of the law of confidence as an alternative to patent protection is concerned, it is essential that the inventor knows exactly when to make the transition from confidential secret to patent, or else they risk loosing eligibility the former should there be a premature application for the latter.

With regard to confidentiality and copyright, the above analysis shows that mere tangibility stands between the two types of IP and the simple move to copyright protection ought to be made.

To sum up, the reality of the law of confidence is that it is a wholly separate type of intellectual property that protects secrets and, as a result, its requirements are wholly revolved around the notion of secrecy and circumstances of divulgence. Consequently, any attempt to squeeze subject matter that normally falls into the copyright or patent category is an artificial manoeuvre that only works in very limiting circumstances. However, the crucially important fact is that, despite such limitations, the law of confidentiality is capable of protecting pre patentable inventions and intangible works, provided that all of the requirements of necessary quality, confidential relationship and the occurrence of unauthorised use are met.

Bibliography

Legislation

1973 Munich Convention on the European Patent (EPC)

1975 Luxembourg Convention on the Community Patent (CPC)

Patents Act 1977

Copyright, Designs and Patents Act 1988

Case Law

Coco v A.N. Clark (Eng) Ltd [1969] RPC 41

Saltman Engineering Co v Campbell Engineering Co [1963] 3 All ER 414

Woodward v Hutchins [1977] 2 All ER 751

Attorney General v The Observer Ltd [1989] AC 109

Herbert Morris Ltd v Saxelby [1916] 1 AC 688

Gale’s Application, [1991] RPC 305 per Nicholls LJ at p 311

Biogen Inc v Medeva plc [1997] RPC 1

Morison v Moat (1851) 9 Hare 49

O. Mustard & Son v S Allcock & Co Ltd and Dosen [1963] 3 All ER 416

University of London Press v University Tutorial Press [1916] 2 Ch 601

Fraser v Thames Television Ltd [1984] 1 QB 44

Text Book Publications

P Torreman, “Holyoak & Torreman’s Intellectual Property Law (Butterworths 4^th edition 2005)

L Bently and B Sherman “Intellectual Property Law” (Oxford University Press, 2^nd edition 2004)

T Hart “Intellectual Property Law” (Basingstoke: Palgrave MacMillan , 3^rd edition, 2004)

R M Milgrim “Milgrim on Trade Secrets ” (New York, M Bender, 1992)

1

Footnotes

^[1] [1969] RPC 41

^[2] [1963] 3 All ER 414

^[3] ibid at p 415. See also Woodward v Hutchins [1977] 2 All ER 751 and Attorney General v The Observer Ltd [1989] AC 109

^[4] [1916] 1 AC 688

^[5] Arts 52(1)-(3) and 53. Interpretation is also identical and considered of the utmost importance. See Gale’s Application, [1991] RPC 305 per Nicholls LJ at p 311

^[6] 15 December 1989 (OJ No L 401, 30.12.1989

^[7] Invention is to be given its everyday meaning but is external to the concept of patentability, which is measured on the basis of the three requirements. See Biogen Inc v Medeva plc [1997] RPC 1 per Lord Hoffmann at p 5

^[8] Herbert Morris Ltd v Saxelby ibid 4

^[9] An example is that of the secret ingredient in Coca Cola and Iron Brew. The strictness of these secrets are such that carpet manufacturers cannot guarantee stain protection from these products!

^[10] (1851) 9 Hare 492

^[11] [1963] 3 All ER 416

^[12] [1916] 2 Ch 601

^[13] ibid at p 605

^[14] [1984] 1 QB 44

^[15] ibid 4

^[16] ibid at p 692